Regulation 194, mandatory producer compensation disclosure, has been described as a solution looking for a problem. It is a burdensome, unnecessary regulation that assumes that all insurance agents and brokers are motivated to misdirect their customers based on compensation. It will put the focus of consumers on unimportant issues such as compensation instead of the truly important issues such as the items to be insured and the protection afforded by the insurance policy sought.

While agent trade groups agree that the regulation is unnecessary, there are differing thoughts on the best way to handle Insurance Regulation 194. IIABNY and CIBGNY believe that the Superintendent lacks the authority to promulgate the regulation and based on this and other factors the regulation should be rescinded. Others have opted not to join us in this fight and turned over all of the responsibility to us. They instead chose to focus on the implementation of the regulation and its impact on agent and broker workflow. We believe that the two are not mutually exclusive and that is why IIABNY is pursuing BOTH tactics.

On May 25th, IIABNY and CIBGNY along with several IIABNY member agencies filed a legal action in New York Supreme Court in Albany to stop the regulation. We knew that it meant more work and more money. But we also knew that someone needed to stand up for agents and brokers across New York and protect their best interest.

Putting all of our frustrations about the regulation aside, we realize it’s unlikely that a final determination will be obtained from the courts prior to the January 1, 2011 effective date of the regulation. Because of that it is very important that every producer is aware of the regulation and fully prepared to comply with it. This will mean agencies have to become comfortable with what the regulation requires and determine how they will comply with it.

That is why IIABNY put together a one hour Web CE program (approved by the New York Insurance Department for 1 CE credit for all licenses) which will review the requirements of the producer compensation disclosure regulation. The first will take place the morning of July 14th, with a repeat offering the afternoon of August 12th. We’re providing these Web CE programs free to our members to make sure everyone has a full understanding of the regulation. The fee for non-members is $40 per person.

Then in the fall, as we get closer to the effective date of the regulation, we’ll present a number of live programs around the state on how to comply with the regulation. Although we hope to overturn Regulation 194 in the courts, we feel that it’s critical to also help our members prepare for its potential implementation, if even temporarily until we receive the final determination from the courts. This is an ongoing battle, so stay informed on producer compensation and IIABNY’s actions at www.iiabny.org/advocacy.

In closing I want to address all those individuals who publicly question the honesty and integrity of agents and brokers. Quit trying to create an issue where one doesn’t exist! There have been no consumer complaints related to agents failing to provide information regarding compensation if asked. IIABNY’s policy is that if a consumer wants to know about a producer’s compensation, the consumer should ask and the agent/broker should tell. If the producer doesn’t want to tell, then the consumer can find a producer that will. You don’t need a burdensome and vague regulation to make it happen.