A Long History of Serving Independent Insurance Agents and Brokers of California

The Beginning

The Independent Insurance Agents and Brokers of California (IIABCal) officially got its start in 1907 when fire and casualty insurance premiums totalled $18.7 million for the entire state of California.  At the turn of the 20th Century, there were no agent and broker licensing laws, no anti-rebate reguatlions and the appointed California insurance commissioner has an annual salary of $4,000.

What we now consider to be common types of insurance were yet to be created. Casualty insurance was rarely sold by agents outside of metropolitan areas, and auto insurance was a new coverage.  Even at this stage in our story, California agents and brokers had troubles as insurance companies ignored broker-agent rights and rate cuttine werer all too common.

Known as a "Brokers' Town," San Francisco brokers began discussion and form an independent broker organization called the "Insurance Broker Exchange."  Shortly thereafter in 1907, Oakland agent I. Harrison Clay, a prime mover in the formation of the Oakland Board of Fire Underwriters, paid a $2 membership fee and received the first national association membership card ever issues to a California agent.  Clay believed it was time to fo rm a state association for California independent agents and brokers.

A Fateful Meeting

Such was the setting when Clay and three other Oakland fire insurance agents met in Oakland one night to discuss the formation of a state agent associaton.  They decided to contact agent friends in Oakland and other agents in Los Angeles and neighboring cities.  Responses were so favorable that they decided to followup with letters with personal meetings.

The matter of funds was discussed.  Clay prepared an estimate of railroad, hotel and entertainment expenses at $140 and each of the four agents continuted $35 to cover the projected costs.  Encouraged by what Clay reported, the Oakland Board issued a call to all the fire insurance agents of the state to meet in Oakalnd to organze the state association.

An Association Is Born

The subsequent meeting attracted 88 delegates representing 26 California cities.  The groups chose as the name, the "California State Association of Local Fire Insurance." Enforcing sound underwriting principals, diminishing fire hazards, securing equitable insurance rates and promoting confidence and harmony among members were quickly established as the association's primary goals. Dues were set at $3 annually, of which $2 went to the national association.  The rest is history.

Timeline: 1908- 1909: California State of Local Fire Insurance formed.  First agent convention held at St. Mark Hotel Oakland; 1912: Membership reaches 106 agents. Association's cash balance is $21.60; 1915: Association's Anti-rebate bill passed by the California Legislature but was "pocket vetoed" by Gov. Johnson; 1917: Member agents dues increase to $5. Resolution adopted to request Legislature to appoint commission to revise and codify state insurance laws; 1920: Agent association authorizes first-paid position of Executive Secretary Willard Done of Los Angeles; 1923: California Gov. Richardson approves three association bills on ccreate a Resident Agents Law and amending the Agents' Qualification and Anti-rebate laws; 1925: Intense association activity to fight the growing number of bank agencies; 1929: First full-time Executive Secretary Frank Colridge is hired.

Timeline: 1931: The first official publication of the California agent association is published; 1934: Membership reaches 1,000 agents, and the association is officially incorporated; 1939: The Insurance Institute of California was organized and incorporated to serve as an Education Department of the state agent association; 1942: State association wins national award for promotion of War Damage Insurance; 1946: An association-backed "Assigned Risk Plan" bill was enacted into California law.  The broker association forms a Southern California branch: 1947: Association conducts 28 meetings throughout the state to explain to agent the state's new Financial Responsibility Law: 1949: The first Institute of Advanced Agency Management was held; 1951: After a 16-year effort, victory for the association led to the enactment of an Anti-coercion law, prohibiting lenders and dealers from forcing borrowers from requiring any particular agent or broker.

Timeline: 1953: Agent association adopts a policy that state that "under the agency agreement, the originating agent retains his/her rights and interests in the policy throughout the entire life of such policy"; 1957: Agent association celebrates its 50th Anniversary. Membership strength grows with 112 local associations and 2,753 member firms; 1959: Agent association award the first P.S.W. Ramsden Award to past president H.H. Hendren of Sacramento; 1961: Federal court decisions, stemming from association lawsuites, prohibit insurers from fixing commissions and protects the right of individual agents to negotiate their own commissions; 1965: To benefit from the public's growing familiarity with the Big "I" the association changes names from California Association of Insurance Agents" to the "Independent Insurance Agents Association of California"; 1966: the agent and broker associations, and other interest groups, form the "Construction Insurance Alliance" which was instrumental in securing enactment of a law prohibiting use of "wrap-up" plans by state and other public agenccies; 1967: Association President James Norris begins push for consolidated policy form among insurance companies which leads to the ACORD forms; 1972: Members of the Insurance Brokers Association of California (IBAC) agree to change its name to the Western Association of Insurance Brokers (WAIB), and the broker group expands into Alaska, Oregon and Washington.

Timeline: 1973: Gov. Ronald Reagan delivers the keynote address at the 66th Annual IIAAC convention; 1976: Gov. Jerry Brown signs AB 841, sponsored by IIAAC, that prohibits banks and holding companies from retail sale of property, casualty and life insurance.  The Insurancce Agents and Brokers Legislative Council is formed to represent California's insurance producer associations; 1982: WAIB hires Michael Cabot as chief executive officer.  Agent association hires Jerry W. O'Kane as chief executive officer; 1987: Agent association beging negotiations with the State Compensation Insurance Fund to open up its workers' comp market to independent agents and brokers; 1988: California voters approve Prop 103 which enacted rate regulations and prior approval of rate filings, rate rollbacks, good-driver discounts, and the election of the state insurance commissioner. 1989: the two associations join other industry groups in fighting unconstitutional provisions of Prop 103; 1992: the agent association elects its first women president, Glenna Androus of Yuba City: 1994: The Independent Insurancce Agents and Brokers of California (IIABC) and the Western Association of Insurance Brokers (WAIB) gebing consolidation negotiations of the two organizations.

Timeline: 1995: The Insurance Brokers and Agents of the West (IBA West) was official formed.  James T. Armitage of Pasadena eleccted first president of the consolidate organization; 1996: IBA West launches statewide Minority Agents Program to help develop the business of California agents who serve inner-city and minority areas; 2000: IBA West is successful in adding provisions to the Insurance Code to make clear that any person who solicits, negotiates, or effects insurance contracts must be licenses as an insurance agent-broker; 2002: IBA West forged a coalition to help persuade the Court of Appeals to overturn a decision that permitted an E&O insurer to deny coverage to an insurance broker by misconstruing an "insolvency exclusion" in the E&O policy; 2003: the association re-establishes itself as a significant player in the legislative and regulatory process by forming the California First Advocacy Fund; 2004: IBA West played a significant role in the passage of workers' comp reform. The association aslo succeeded in preventing legislative elimination of the State Fund Broker program and the State Fund brokers' commission; 2005: Association grassroots efforts resulted in the Legislature's rejection of the insurance commissioner's proposal to each new fudiciaty duties on agents and brokers; 2007: IBA West celebrates its 100th Anniversary.

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