Ruling Protects Insurance Agents Who Help Customers With Pricing

In a move that protects insurance agents who offer discounts or help customers penetrate the mysteries of insurance pricing, the California Supreme Court ruled Thursday that life insurance companies are subject to state antitrust laws.

The high court unanimously upheld a lower court ruling in a case that arose when an Oakland-based brokerage named Weil Insurance Agency sued competing brokers and Manufacturers Life Insurance Co., accusing them of conspiring to boycott Weil in retaliation for the consulting work the agency was performing for trial lawyers.

Weil advised trial attorneys about the costs of annuities that liability insurance companies would offer in settlement of personal injury cases. The lawyers would use the information to obtain better settlements.

However, according to the lawsuit, competing brokerages, insurance companies and a national trade association banded together to prevent Weil from getting access to the information and to discourage annuity companies from doing business with them.

Weil argued that the defendants’ activities amounted to illegal price-fixing, boycotting and restraint of business--all violations of the Cartwright Act, California’s 1907 antitrust law.

Manufacturers Life and other insurers who joined it in the case argued that the insurance industry is exempt from state antitrust law.

But the Supreme Court, upholding an appellate court decision, rejected those arguments and sent the case back to a lower court for trial.

Michael Strumwasser, a lawyer who has represented the state Insurance Department, said the decision not only aids brokerages offering price information, but also makes it clear that it is illegal for companies to retaliate against agents who offer cut-rate insurance by reducing their commissions.