Until the Independent Insurance Agents and Brokers of New York (IIABNY) announced that they would sue the Insurance Department in an article 78 proceeding, most of the institutional rage over the proposed producer compensation disclosure legislation amounted to successive declarations of “now we’re really mad” followed by a series of corrections and changes in the draft regulation. Small gains and compromises were, in fact, effected through the various trade associations, lobbying and working with the New York State Insurance Department. But no amount of sugar could make this medicine go down in Syracuse. Turns out, IIABNY, thus far acting alone, has taken this rather courageous step, risking possible enmity, money, and, if you believe some observers (I do not) potentially harsh enforcement of the regulation by an angered department. The reality is, no one at NYSID will take the law suit personally, nor will IIABNY incur much wrath for taking such a step. There is some political capital at stake, but why keep it in the “bank” when you need it now? For IIABNY we see a win-win. The association leadership debated the matter for many hours during its recent board meeting in Albany and determined, ultimately, that the regulation, no matter how much the ingredients seemed changed, was still the wrong dish to be served to the public and to agents. Members will appreciate what they are doing, once IIABNY lets them understand the matter and plays out its progress. If they prevail, well, they become the agent’s sweetheart. The whole matter started over illegal practices, identified and prosecuted, involving some jumbo sized brokers; now, as a consequence, everyone will need to perform a disclosure. Rumor as to the department’s spur in the enactment of the regulation range from quite rational to comical. No matter, we feel there is no “vendetta” on anyone’s behalf in the department: there is surely no desire on the department’s behalf to do some willful harm to the livelihood of independent insurance agents. We believe these are dedicated public servants for the most part whose zealotry for transparency will be tried. The public, whom the NYSID protects, might do well to understand that insurance agents operate on commissions and incentives. The only public not aware of this form of payment resides in Saturn. Nonetheless, there is some merit in suggesting that the consumer be advised as to the format and have the opportunity to inquire. But that already exists, no? In all, we respect IIABNY’s decision to pursue the Article 78 path on behalf of its members to the fullest extent. As long as members continue to support the association, the outcome for IIABNY will be good no matter what the courts determine, The other associations in the state have worked hard to gain changes to the reg. to make is more palatable. To date, they have been silent on the suit. Some have opined that a legislative remedy will work and others, that the changes are fair. RIMS has opined that they do not go far enough! For the average producer, it’s a problem on many levels. One agent gave us the (rather hyperbolic) analogy to the death penalty, i.e. that no matter how pleasant and easy and painless you seem to make the process, to the condemned, it’s still death. The IIABNY case may provide a stay of execution for agents.