The Council of Insurance Agents & Brokers on Wednesdaypraised New York Insurance Superintendent Eric Dinallo for therelease of Circular Letter 9, which provides producers withguidance on permissible activities under New York's anti-rebatinglaws.

CIAB said it worked with Superintendent Dinallo and regulatorsat the New York State Insurance Department to bring a more cohesiveand straightforward approach to the types of value-added servicesproducers may provide to their clients that remain within theconfines of state anti-rebating laws.

The issuance of the letter is "one more step toward modernizingan insurance regulatory regime that has sometimes not kept pacewith the realities of business today," CIAB said.

CIAB President Ken A. Crerar said in a statement: "We thankSuperintendent Dinallo for bringing clarity to what hasincreasingly become a compliance nightmare for our members. Thiscircular letter is great news for commercial insurance consumers aswell."

He noted that the department's approach "protects consumers andallows producers to provide the value-added services theircommercial customers have come to expect in today's marketplace. Italso provides a flexible framework for evaluating thepermissibility of offering value-added services in the future thatmay not exist today."

Superintendent Dinallo noted shortly after taking office thatthe current anti-rebating regime needed reform. The CIAB said itdiscussed with the department some proposed solutions forclarifying which activities do not run afoul of the anti-rebatinglaws.

The Circular Letter issued by the department represents"much-needed reform to an anti-rebating regime that has not keptpace with the evolution of value-added services offered byproducers," CIAB said. The guidance offered in the letter willbenefit commercial insurance clients by making it clear whatservices producers can offer to those clients--services which theymay have hesitated to offer in the past for fear of violating theanti-rebating laws.

The action by Superintendent Dinallo "provides a workableframework for analyzing whether services provided by a producer runafoul of the anti-rebating laws that will stand the test of time.We thank Superintendent Dinallo for adopting this principles-basedapproach, which has been a hallmark of his tenure in office," Mr.Crerar added.

New York has issued more than 170 opinion letters over the yearsthat provide fact-specific interpretations--some of them inconflict with others--of which producer activities run afoul of theanti-rebating laws. CIAB members identified these conflictinginterpretations as having a chilling effect on the types ofvalue-added services they offered to their clients, including riskassessment and management, claims assistance, insurance consultingand COBRA benefits administration, the organization said.

Circular Letter 9 provides clarification that insuranceproducers may provide a service to the client that is not specifiedin the insurance policy if two conditions are met:

o The service directly relates to the sale and servicing of thepolicy or provides general information about insurance riskreduction.

o The producer provides the service in a "fair andnondiscriminatory manner to like" customers.

Several other states have been examining the application oftheir anti-rebating laws in recent months, the organization said,adding that it hopes those states will "take note of the balancedapproach taken by New York and consider adopting similarprovisions."