IIABNY annouced recently its plans to sue the New York State Insurance Department over the new regulation that requires extensive producer compensation disclosure from all agents & brokers. The Insurance Advocate in a phone conversation with the Insurance department has garnered this response from Andy Mais, Director of Public Affairs for the New York Insurance Department. 

“This regulation protects consumers and their right to receive the information they need when making important financial decisions. We are confident in our legal authority to promulgate the regulation and look forward to aggressively defending it in court if necessary."

Under the final regulation, which takes effect Jan. 1, 2011, producers operating in the state must, among other requirements, disclose to clients their role in the insurance transaction and whether they will receive compensation from an insurer based on the sale. Further information about the nature, amount and source of that compensation must be disclosed to clients upon request.

The disclosure regulation does not apply to reinsurance placements, insurance placements within a captive insurance company, wholesalers and on renewals.