Big I NY Meets with Governor’s Office to Urge Veto of Non-Compete Ban Bill
On Thursday, October 12th, Big I NY met with counsel to Governor Hochul and urged that she veto legislation that would ban the use of non-compete agreements.
While we appreciate the intentions behind this bill, we firmly believe that a blanket ban on non-competes would have detrimental consequences for the independent insurance industry, particularly in the context of business sales and acquisitions.
Big I NY believes this bill must be vetoed for the following reasons:
Preserving Business Value: Insurance agencies invest time and resources in building and maintaining client relationships. A non-compete agreement prevents departing agents from taking clients and policy expirations with them to a competitor, preserving the value of the agency’s book of business.
Protecting Policyholders: Non-competes also serve to protect policyholders’ interests. When policyholders have a longstanding relationship with their agent, they may prefer to continue doing business with the same agency, even if the agent changes employers. Non-competes help ensure continuity of service and protect policyholders from being aggressively solicited by departing agents.
Encouraging Investment: Prospective buyers of insurance agencies are more likely to invest in the acquisition if they can reasonably expect to retain the policy expirations and clients associated with the agency. Non-competes provide this assurance and, in turn, stimulate the growth and development of the insurance industry.
A thoughtful and tailored approach to addressing non-competes in the insurance industry is essential. Blanket prohibitions, as proposed in the current bill, risk undermining the integrity and value of insurance agencies and could have unintended negative consequences for policyholders.
The governor must act on the bill by December 31st. Agents are encouraged to contact Governor Hochul and urge her veto the bill.
Topics
