Posted on 04 Jun 2010
PIANY-drafted primary disclosure language received formal approval from the New York State Insurance Department. The sample disclosure wording was developed by PIANY and discussed during a series of meetings with NYSID officials over the last month.
Paul Zuckerman, NYSID assistant deputy superintendent and counsel, notified PIANY today that the primary disclosure language it created would comply fully with the requirements of Reg. 194, scheduled to go into effect on Jan. 1, 2011.
"PIA continues to object to the regulation, but we are pleased that our ongoing discussions with the NYSID have already garnered clear guidance from the department on critical compliance issues,” said PIANY President Kevin M. Ryan, CIC. “This is just the first part of the compliance guidance that we will be providing members over the next few months.”
The PIANY-crafted disclosure language fully satisfies the primary disclosure component of the regulation and must be presented to policyholders (orally or in writing) at or prior to the time of application for an insurance contract (issued after Jan. 1, 2011). If the information is provided orally, however, it must also be provided in writing no later than the issuance of the insurance contract. The approved disclosure language and the NYSID approval letter may be found on PIA’s Agent & Broker Compensation Disclosure website under the tools section. It is recommended that agency principals start to plan how and when disclosure language will be provided to their policyholders.
PIANY will meet with the NYSID again upon the department's completion of a draft Circular Letter setting forth additional compliance guidance relative to the secondary disclosure requirements of the regulation. The Circular Letter will address the questions, concerns and language presented by PIANY during its ongoing discussions with the NYSID. Among the issues still to be addressed include: disclosure requirements for nonresident producers; the approval of use of averages and percentages to describe compensation; when compensation is based upon a sale; clarification of who is a producer in a transaction; and minimizing paperwork and record retention requirements.
PIA will continue to work with the NYSID to ensure that, should the regulation go into effect as scheduled, producers are able to comply with the regulation in as noninvasive and simple manner as possible.