When California Gov. Arnold Schwarzenegger in late September signed bills creating the nation's first state exchange under PPACA, the move was a "disappointment" and "clearly dangerous" to health insurance brokers and advisers, say those who have been following the legislation's development.

The California Health Benefit Exchange will be governed by a five-person independent oversight board with the power to determine how the exchange will operate in time for the January 2014 deadline imposed by PPACA. The two bills establishing the exchange make no mention of a role for brokers. "While the governor is well aware of who brokers and agents are and what they bring to the table, the bills that were written do not include agent language in them," says Neil Crosby, VP of public affairs with the California Association of Health Underwriters. "It is a disappointment to us; however, it's not the end of the world."

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