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Dynamex Decision – We Need Your Help

NAIFA-California needs your help in fighting a recent CA Supreme Court ruling that could change many 1099 contractor relationships into W-2 employees. This could impact you as an agent/advisor; affect independent contractors you hire, and even agents whom you partner on business. Imagine a world where you are now a W-2 employee for every single insurance carrier you’re contracted with? How could this negatively affect your commissions, ability to serve clients, ability to work independently and impact your tax reporting and deductions?

You may have heard about the recent ruling by the California Supreme Court in Dynamex Operations West v. Superior Court (“Dynamex”) that created a new worker classification standard. The new standard referred to as the “ABC Test,” is far more rigid than the previously used scheme to determine whether a worker is an independent contractor or employee. Under this new “ABC Test,” a person will be considered an independent contractor only if the hiring entity can prove all three of the following:

(A) That the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
(B) That the worker performs work that is outside the usual course of the hiring entity’s business; and,
(C) That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

NAIFA-California recognizes that this ruling could have negative implications across all sectors of the economy, including insurance agents and advisors. The concern is that the Dynamex decision would hurt agents and advisors seeking flexible, independent or part-time work. As such, we are working with others in the broader business community, as well as our partners in the insurance industry, to raise the issue and identify the negative consequences this new test could have on independent contractors. Several stakeholder groups are urging the Legislature and Governor’s Administration to engage on this issue and suspend the application of the Dynamex decision until all parties impacted by this decision can work together to develop a balanced test for determining independent contractor versus employee status that reflects the needs of California’s economy and the workforce. NAIFA-California is tracking this conversation closely to ensure that those working in the insurance and financial services industry are protected.

We need your action on this important decision immediately. Please do the following to help stop this overreach from directly affecting your independence and ability to serve your clients:

Visit to sign-up and have your voice heard.

Give to IFAPAC (Insurance and Financial Advisor Political Action Committee)

Encourage a Friend to Join NAIFA

SIGNED BY GOVERNOR -- SB 1248– California Partnership for Long-Term Care Program– SUPPORT  

SB 1248 would revise the minimum benefit levels for long-term care (LTC) insurance policies certified by the California Partnership for Long-term Care Program (“Partnership”). The Partnership seeks to increase LTC insurance coverage among modest and middle-income individuals, however, current program standards drive up costs making the policies unaffordable.

NAIFA-California is proud to have supported SB 1248 by Senators Ted Gaines and Steve Glazer.  The bill is important to the long-term care marketplace by seeking to provide greater access to long-term care insurance policies certified by the California Partnership for Long-term Care Program. 

SIGNED BY GOVERNOR -- SB 1121– Privacy Clean-up Bill – SUPPORT 

In 2018, the Legislature enacted the California Consumer Privacy Act of 2018 (CCPA.  This law focuses on consumers’ rights and control over their personal information as well as transparency requirements related to a companies’ data practices.  The measure has broad implications for organizations providing services to or collecting data from, consumers.

In working with NAIFA‐California and the other insurance trade groups, the Legislature recognized that insurance agents and brokers are currently subject to a number of state and federal privacy laws.  As a result, SB 1121 (Dodd) was passed and signed into law to clarify an exemption from the CCPA of information that is collected, processed, sold, and disclosed pursuant to the Gramm-Leach-Bliley Act (GLBA).  This clarification will eliminate confusion for the insurance industry in our effort to comply with privacy rules and allows us to largely follow the existing standards.

As licensed insurance and financial professionals you constantly handle customers’ personal and sensitive information.  In an effort to help agents and brokers comply with GLBA and California Insurance Code 791-791.27, below is a list of requirements that agents and brokers must be aware of:

  • Annual delivery of privacy statements to consumers who agents and brokers have an on-going relationship.  The statement must explain privacy practices and give the consumer the right to opt-out of having their information shared with certain third parties.
  • Properly securing information and restricting access to third parties, which, among other things, includes limiting access to customer information databases and permitting access to only authorized individuals.


In the aftermath of the 2017 wildfires, the issue of underinsured properties returned to the forefront.  These devastating firestorms were among the worst in our state’s history and sadly several Californians lost their homes.  Many fire victims also found themselves underinsured for a variety of reasons including marketplace pressures resulting in policyholders not purchasing the appropriate coverage limits.  In response, the Governor signed a couple measures aimed at providing additional consumer protections for homeowner insurance this year. 

AB 1797 by Assemblymember Marc Levine requires insurers to provide an estimate of replacement value for the insured property for new business and offer to provide a new estimate with every other renewal.  Another wildfire insurance bill, AB 1875, by Assemblymember Jim Wood aims to connect consumers who need residential property insurance with agents and brokers to help ensure they obtain plans and coverage that suit their specific needs.  More specifically, this bill requires an insurance agent or broker who does not provide at least 50 percent extended replacement cost coverage to help direct the consumer to an insurer that might.

Given these new laws, it is vital that NAIFA-California members do our part in helping educate consumers on insurance-to-value and encourage them to better understand their policies.  Additionally, NAIFA‐California strongly encourages you to reach out to all of your policyholders annually upon renewal to revisit the policyholder’s coverage needs and to make sure that any and all changes made to the property have been disclosed and accounted for in the coverage limits.

SIGNED BY GOVERNOR -- AB 2499– Health care coverage: medical loss ratios – REMOVED OPPOSITION

AB 2499 would have increased the minimum medical loss ratio (MLR) percentages for the small group and individual market from 80% to 85% and the large group market from 85% to 90%.  The administrative portion of the MLR includes commissions to agents and it could have been detrimental to agents selling health insurance in their communities.

We were strongly opposed to AB 2499 authored by Assemblymember Joaquin Arambula, which could have negatively impacted licensed, certified health insurance agents who have helped millions of Californians find and keep affordable health care coverage, reducing the percentages of those who are uninsured to a record low of 6.3%.  If the administrative portion of the MLR was reduced as was proposed by AB 2499, the consumer would lose the vital benefit of a qualified health insurance agent who is able to assist in navigating complex healthcare management issues.

Thanks again in part to NAIFA-California’s lobbying efforts, AB 2499 was amended to simply codify the current federal law as it pertains to the medical loss ratio.  As a result, NAIFA-California was able to remove its opposition and is now neutral on the bill. 

DEFEATED -- AB 3087 – California Health Care Cost, Quality, and Equity Commission– OPPOSE

AB 3087 would have established an appointed commission to impose price controls on health care providers and insurers and determine the amount of an individual’s copays and deductibles.  The bill could have significantly jeopardized NAIFA-California’s members’ clients ability to access health care.   

NAIFA-California was opposed to AB 3087, authored by Assemblymember Ash Kalra, because it would have capped payment rates on health care services and severely jeopardize people’s access to care. As a trade association representing insurance agents and advisors, we recognized the importance of health care insurance and affordability of that coverage.  However, we were concerned that this legislation would have destabilized the health insurance marketplace.

Thanks again in part to NAIFA-California’s lobbying efforts and the DOTH attendees, AB 3087 did not move forward in 2018.

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