Fresno area company served cease and desist for alleged illegal insurance sales
News: 2016 Press Release
CLOVIS, Calif. — California's insurance regulator, Dave Jones, moved to stop a central valley company from selling workers' compensation and liability policies because they are not properly registered with the Department of Insurance, which means those insured through the company may not have valid insurance coverage.
In the cease and desist, served Monday, October 17, 2016, the department alleges Agricultural Contracting Services Association, Incorporated, doing business as American Labor Alliance and its affiliate CompOne USA, are soliciting, marketing, selling, and issuing to employers statewide what the company claims are valid workers' compensation policies, when in fact the department's Investigation Division found the company is not properly registered with the regulator and is allegedly transacting insurance without proper authority.
"Employers who purchased insurance from American Labor Alliance are likely at great financial risk," said Insurance Commissioner Dave Jones. "Employers must protect themselves, their employees, and their business by checking with the Department of Insurance to verify the company and agent or broker's license is valid and that the policy they purchased is also valid."
American Labor Alliance attracted customers by marketing low workers' compensation premium rates, but the end result is employers holding worthless pieces of paper, as the policies are not valid, which means the employers have no coverage—leaving them and their employees at great risk.
The order is effective immediately. Employers transacting business with Agricultural Contracting Services Association, Inc., American Labor Alliance, or affiliate CompOne USA, should contact the Department of Insurance Investigations Division at 661-253-7500 for assistance in determining the validity of their workers' compensation coverage.
American Labor Alliance has requested an administrative hearing before an administrative law judge. The hearing is not yet scheduled. If American Labor Alliance continues marketing and selling the alleged illegal products, in defiance of the department's cease and desist order, they face fines up to $5,000 per day for each day they do not comply.
Link to Federal Department of Labor information on Multiple Employer Welfare Arrangement under the Employee Retirement Income Security Act: http://bit.ly/2eorcF5
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.