An insurance agent based in Los Angeles is suing an insurance company in Louisiana, claiming that the company had an illegal clause in its business contract agreement.
On August 7, Robert Moreno Sr. of Robert Moreno Insurance Services (RMIS) filed a lawsuit in US District Court for the Central District of California, Southern Division against Americas Insurance Company (AIC) and John Does 1-10 inclusive, alleging that a portion of the business contract is illegal by California law.
The complaint detailed that RMIS was contracted as a managing general agent for AIC. When reinsurance agreements were being provided to RMIS, AIC suddenly reduced the runoff ceding commission to 5%. Due to the low commissions, after paying AIC’s fees, RMIS would operate at a loss, the suit claims.
RMIS contends that this net loss is illegal under the California Insurance Code. Additionally, the suit states that AIC failed to provide a second agreement, which covers June 1, 2014 through June 1, 2015, until May 5, 2015. The agency discovered at that time that AIC was still maintaining the alleged illegal commission structure.
RMIS seeks judgment over the enforceability of the offending part of the agreement, unspecified recompense for damages, costs of suit, and other relief the court deems appropriate. Attorneys Robert W. Barnes and Andrew V. Jablon of Resch Polster & Berger, a law firm in Los Angeles, represent RMIS.