The California Department of Insurance has given a Fresno company a cease-and-desist orderto stop selling workers’ compensation and liability insurance policies because the firm is not properly registered.
Agricultural Contracting Services Association Inc., which does business as American Labor Alliance, and its affiliate CompOne USA have been selling low-cost policies to companies statewide. But because the company is not registered with the state Insurance Department, its policies are invalid. “The end result is employers holding worthless pieces of paper,” the Insurance Department said in a news release.
“Employers who purchased insurance from American Labor Alliance are likely at great financial risk,” said David Jones, California’s insurance commissioner. He said employers must check a company’s license to make sure it is valid before purchasing insurance.
American Labor Alliance requested a hearing before an administrative law judge. Until then, American Labor Alliance faces fines up to $5,000 a day if it continues to market and sell policies in defiance of the cease-and-desist order.