New York Submit notice requirement on the remuneration of pr

 

Friday, Mar 06,2009, 5:30:51 PM   Click:

New York Submit notice requirement on the remuneration of producers Alyn Ackermann
New York regulators offer compensation transparency regulations that would require all agents and brokers in the State to inform their clients of their total compensation from insurers, including fees.

The regulation does not ban the fees, as some had called consumer organizations.

A discussion of the draft Regulation of insurance has been circulated among members of industry groups and consumer organizations by the New York Insurance Department.

"We are talking to brokers, agents, insurers and consumer groups," said Matthew Gaul, a special counsel who authored the proposal. "Even in the few phone calls, are the opinions of the range everything from applause to the inverse of applause."

The proposed settlement comes after a series of hearings on the compensation issues had less years by officials of New York, which was to determine whether the restrictions imposed on some of the largest brokers in 2005, institutions which have monitoring bid-rigging investigations (BestWire, July 14, 2008).

The disclosure requirements are similar to the disclosure imposed on Aon Corp., Marsh & McLennan Cos. and Willis Group Holdings Ltd. New York, and Arthur J. Gallagher & Co. in Illinois, as part of settlements. These brokers are also prohibited from accepting fees from insurers.

Officials of these brokers have been critical of what they call a dual regulatory system, and each of the three institutions that have reached brokers in New York has made statements supporting the proposal for a regulation ..

Gaul said the proposed regulation does not alter the prohibition on fees, or to extend that ban to other producers.

"There has been a major criticism on the existence of a difference field," said Gaul. "We think it goes much of the track in terms of leveling the playing field."

The regulation should require that all agents and brokers to provide each customer a written notice stating that the May producer receive premium insurance companies that could influence decisions on investment policies. They would also be required to provide its customers, upon request, information on all the payments they receive for recommending a policy.

"We are open to comments," said Gaul. "Some form of transparency is to come. But in May there be a debate on the mechanics, timing, nature of the disclosure."

Gaul said the proposal must be approved by the Governor's Office of Regulatory Reform, and a comment period is open. The ministry hopes to implement the regulations by the end of the year.

According to Best's Review ranking of global brokers, Aon is the largest broker based on brokerage revenues in 2007, MMC is second, third and fifth Willis Gallagher.

(By Alyn Ackermann, senior editor, BestWeek: Alyn.Ackermann @ ambest.com)

Copyright © 2009 hours Best Company, Inc. New York regulators offer compensation transparency regulations that would require all agents and brokers in the State to inform their clients of their total compensation from insurers, including fees.