An insurance carrier represented by the firm was alleged to have violated Act 143, which requires certain actions to be followed prior to an agency termination. Pursuant to Act 143, an insurance carrier is required to make a reasonable attempt to rehabilitate an agency if the agency agreement is terminated due to adverse experience, mix of business or lack of premium volume. 40 P.S. §242(e). If termination of the agency contract is not for one of these reasons, rehabilitation is not required.
The insurance agency filed a Complaint with the Pennsylvania Insurance Commission alleging that the carrier violated Act 143 when it terminated the agency relationship without rehabilitation, and a hearing was scheduled.
Attorney Sysak presented a case to the Commission that the carrier did not act outside of Act 143 by establishing through the evidence and testimony that the termination was in fact based upon an adversarial and hostile relationship that had developed due to the agency’s actions. The facts and circumstances surrounding the deteriorated relationship ultimately warranted the termination of the agency agreement between the parties without the carrier having to offer rehabilitation.
After hearing all of the evidence and testimony, The Pennsylvania Insurance Commission rendered a decision in favor of the insurance carrier finding that the termination of the relationship was proper, and not in violation of Act 143.
For further information on this case, please feel free to email Attorney Sysak at ads@andrackilaw.com or call 412-281-3330.