New York state officials plan to hold three fact-finding hearings on agent and broker compensation arrangements this month, the state's Department of Insurance said.

The Insurance Department and state attorney general will hold a joint hearing in three cities this month. The first hearing will be on July 14 in Buffalo, moving to Albany on July 23, and concluding July 25 in Manhattan.

Issues to be covered at the hearings include contingent and supplemental commissions, producer compensation disclosure, and deceptive or anti-competitive practices, the department said.

The hearings arose from the 2004 investigations by the New York Attorney General's Office into a number of insurance brokerage firms over allegations they rigged bids and steered insurance contracts to favored insurers in exchange for lucrative, volume-based contingent commission payments.

Four major brokers–Marsh, Aon, Willis and Arthur J. Gallagher–reached settlements with the Attorney General's Office and agreed to give up taking contingent commissions.

The hearings are designed to get the views of all interested parties on the proposed addition of a new regulation governing compensation and disclosure, the department said.

“Those who sell insurance deserve to be fairly compensated, and those who buy insurance deserve to be fairly treated,” said Insurance Superintendent Eric Dinallo in a statement. “These hearings will help us understand how best to ensure the marketplace is competitive, transparent and fair to all.”

He said his agency “wants to hear views about whether agents, brokers and all other insurance producers should be required to make full disclosure to the insured and obtain consent in writing for any compensation from an insurer, or other entity relating to the issuance, renewal or servicing of the insured's insurance policy or annuity contract.”

The department said Mr. Dinallo and State Attorney General Andrew Cuomo are also seeking views on contingent commissions and whether such compensation creates an irreconcilable conflict of interest for producers, the department said.

The state officials said they are interested in learning to what extent contingent, supplemental and flat percentage commissions are currently leading to steering or other deceptive or anti-competitive practices in the marketplace, and to understand what mechanisms are most effective to curb such practices.

The July 14 hearing in Buffalo will be held at the Buffalo & Erie County Public Library.

The July 23 hearing in Albany will be held in Chancellor's Hall, State Education Building.

The July 25 hearing in Manhattan will be held at New York University, Eisner and Lubin Auditorium, 4th Floor, Helen and Martin Kimmel Center for University Life.

All hearings are at 10 a.m. and open to the public. Anyone wishing to testify should contact the Insurance Department's Public Affairs Bureau at (212) 480-5262. Oral testimony will be allowed for up to five minutes per person.

Written comments may be submitted to Broker Compensation Hearings, Public Affairs Bureau, New York State Insurance Department, 25 Beaver Street, New York, NY 10004, or e-mailed to [email protected] with the subject line “BROKER COMPENSATION HEARINGS.”

The Insurance Department said comments will be accepted by the department for up to 15 business days after the public hearing.

The hearings will be webcast live. Information on the hearings, including directions to the locations and how to watch the webcast is available on the department's Web site at www.ins.state.ny.us.