U.S. insurance group challenges state law

The state calls it an important consumer protection measure; opponents say it's an unconstitutional tactic to protect insurance agents from out-of-state competition.

A lawsuit seeking to strike down Nevada's countersignature statute continues to work its way through U.S.

District Court in Las Vegas even as the group spearheading an assault on the laws nationwide files challenges elsewhere.

Nevada's countersignature law says that no out-of-state insurance broker can sell a policy in the state unless it's countersigned by an agent who lives in the state.

And the agent living in Nevada must be paid at least a 5 percent commission on the premium for providing the countersignature.

The law has been challenged by The Council of Insurance Agents & Brokers, a group of about 250 large insurance agencies and brokers based in Washington, D.C., and a Sacramento insurance agent, Rebecca Restrepo.

The council's legal action, filed two years ago, contends that the countersignature law unconstitutionally discriminates against out-of-state insurance brokers, said Scott Sinder of Collier Shannon Scott, the group's general counsel.

Outside of the courts, the council calls the Nevada law and a handful of similar statutes remaining on the books elsewhere a barrier to trade.

"These countersignature laws are the last vestiges of a bygone era of protectionism, and it is time to wipe them out," said Ken Crerar,

president of The Council of Insurance Agents & Brokers.

A Nevada official said the state believes the countersignature requirement protects consumers.

Debbie Thurner, supervisor of the producer licensing section of the Nevada Division of Insurance, said the law took effect in 1972 to ensure that insurance buyers had an agent in the state they could contact about their policy.

Before the law, Thurner said, out-ofstate brokers sometimes would sell a policy in the state, then leave.When consumers had questions, they didn't know where to turn.

A federal judge in Florida overturned a similar law in that state in September.

In West Virginia, the legislature rescinded a similar law after the insurance council filed suit.

Lawsuits still are pending in South Dakota and the U.S.

Virgin Islands, and the council this month filed an action in Puerto Rico.