3-YEARRULE

One ancillary issue with the “ more than 3-year rule” relates to the termination of an insurer contract with an agency. R.S. 22:23 prohibits an insurer from soliciting the customers of an independent insurance agency. (Brought to you by IIABL to protect your “ownership of expirations.”) However, the “ more than 3-year rule” requires the insurer to continue to offer renewals to policies more than 3-years old. In order to protect our members, IIABL passed legislation to require insurers to pay independent agents 36 months of commissions on Homeowners policies that the insurer takes over after the termination of an agency agreement.

R.S. 23.B.(4)

(4) When the agency contract is terminated and the insurance company is required by law to continue coverage for the insured; however, in that event, the insurance company shall continue to pay the producer commissions on such policies that the company is required to renew during the thirty-six month period following the effective date of the termination or three years, whichever is sooner. The commission shall be at the insurer's prevailing commission rates in effect on the date of renewal for that class or line of business in effect on the date of renewal for producers whose

Continued from page 11 contracts are not terminated.

As you can see, there is a lot to these “ more than 3-year statutes.” We hope that is analysis is helpful to your understanding, but if you have questions, you can contact Benjamin Albright at BAlbright@IIABL.com or JAlbright@IIABL.com for more information or clarification.