Question from an IIABNY member: We have had a client in the past couple of years cancel for nonpayment on his auto policy. The last two times were for not sufficient funds. He doesn’t qualify for any of our standard markets due to the payment history. If one of the nonstandard companies would take him back, are we obligated to write him again, or can we tell him no, due to his past payment history with our agency?
Answer: Unless you’ve signed a contract with the client promising to obtain insurance for him, you have no legal obligation to continue your business relationship with him. The New York Insurance Department (now the Department of Financial Services) issued a 2006 advisory legal opinion stating:
The Department’s longstanding position is that a broker may discontinue its relationship as a producer with an insured either during the term of the policy, or upon renewal time, absent contractual agreement to the contrary between the producer and the insured or the insurer. The terminating broker should advise the insured of the right to continue coverage with the insurer, and the right to choose a new agent or broker if the insured so desires.