Posted on 11 Feb 2010
The Independent Insurance Agents and Brokers of New York announced plans to file legal action to halt a new regulation from the New York Insurance Department that is designed to offer greater compensation transparency by requiring insurance agents to inform clients of how much they make in commissions.
The regulation, set to go into effect on Jan. 1 next year, would compel agents and brokers to give customers disclosure statements explaining their role in the process and how they are paid. If the customer asks how much commission the producer will get, and how much he or she would receive with other quoted policies, that information must also be provided.
IIABNY has worked with the Insurance Department for about five years to come up with a palatable regulation. The group’s board concluded that the final rule, as written, would “place an undue burden upon its members for no justifiable reason.” IIABNY is also challenging the Insurance Department’s authority to promulgate the regulation.
IIABNY President and CEO Dick Poppa said, “IIABNY has a responsibility to represent and to protect the interests of its members, and our members have unanimously and vociferously told us that this rule is unnecessary, ineffective and overly burdensome to their businesses.
Says Poppa, “We cannot sit back idly and let the department impose an unnecessary rule that will only serve to add another time-consuming and costly requirement for our members, which in turn could also result in additional costs to consumers.”