The California Department of Insurance decision to drop plans for an agent-broker compensation disclosure regulation in favor of voluntary guidelines has sparked an argument between agents' groups over whether those guidelines would effectively impose the same burden.

California Insurance Commissioner John Garamendi announced earlier this month that he was suspending efforts to enact the regulations in light of a set of guidelines crafted by the Insurance Brokers and Agents of the West that he felt would provide consumers with adequate protections.

The proposed regulations would have required insurance agents and brokers to disclose to clients what compensations they receive from insurers and what compensation they would receive for placing their clients business with that company, or how that compensation would be calculated. Agents and brokers would also be prohibited from accepting any compensation from a third party without first obtaining a client's consent.