Posted on 11 Sep 2009
The New York Insurance Department on Thursday announced it is proposing a new Producer Compensation Transparency Regulation and has sent it to the Governor's Office of Regulatory Reform (GORR) for review. The proposed regulation would require insurance producers to notify insurance consumers of their right to request information on compensation provided to producers by insurers for the sale or service of insurance.
Now in its third iteration, the latest version of the rule was altered slightly since the previous version that was released July 8, according to Matthew J. Gaul, special counsel with the New York State Insurance Department. In particular, the department removed a blanket exemption for renewals and added a requirement that oral disclosures be followed up with written disclosures, he said.
However, the rule still requires insurance buyers to ask for compensation information before producers must disclose it, rather than automatically receiving it, he said.
The proposed regulation the result of extensive outreach to interested parties, including representatives of the insurance industry and consumer groups, beginning with public hearings in July 2008. After approval by GORR, the proposed regulation will be published in the New York Register, followed by a 45-day formal public comment period. After reviewing any comments received, the Department may adopt, revise or withdraw the proposed regulation.