Posted on 01 Sep 2010
Last Thursday, PIANY met with the New York State Insurance Department to discuss the NYSID's draft circular letter on producer compensation disclosure. While reiterating its long-standing opposition to the regulation, PIA delivered specific draft language changes to the department's draft circular letter reflecting member concerns, as well as those of the association's Agent and Broker Compensation Disclosure task force. Also included was a request that the NYSID consider extending the regulation’s effective date beyond Jan. 1, 2011, to give producers ample time to understand the requirements of the regulation and modify their agency work flows and management systems to comply.
The NYSID indicated that it would consider such an extension during the meeting, during which progress was made on several other issues, including:
* identifying which producer is required to comply with Reg. 194 when more than one retail licensee is involved in a transaction;
* how to describe compensation other than straight commission;
* more definitive language regarding what constitutes a renewal;
* outlining the scope of what compensation needs to be reported; and
* ensuring that direct writers’ employee producers must comply with aspects of the regulation that apply to them.
The NYSID also committed to continued contact with PIA, and to working with the association to educate producers and provide authoritative compliance guidance. PIANY believes certainty on several key practical issues cannot be established until the NYSID determines its position on concerns the association has addressed in its discussions. PIANY will provide members with a complete analysis of the circular letter and comprehensive education, in keeping with the association’s commitment to provide members with authoritative, step-by-step guidance on Reg. 194.
These new developments are the most recent in a series of successes PIA has made toward mitigating the potentially burdensome and confusing provisions of the regulation. Earlier this summer:
* PIA-drafted primary disclosure language received formal approval from the NYSID.
* PIA created a step-by-step compliance overview for agency owners to explain when disclosure is required by the regulation–and when it’s not necessary.
* PIA developed an Agent & Broker Compensation Disclosure website, where these and other tools are available.