NU Online News Service, Aug. 31, 3:30 p.m.EDT

A Professional Insurance Agents of New York (PIANY)representative said she believes state regulators will make someproducer compensation guidance language changes after a meeting washeld to discuss a draft circular letter on a planned compensationdisclosure regulation.

PIANY representatives met late last week with the New York StateInsurance Department (NYSID), and Diane Fowler, PIANY executivedirector, said her understanding is that the department was "veryreceptive" to concerns the agent group raised.

She added that she believes the department will incorporate someof the changes PIANY supports, but would not say which changes havethe best chance of making it into the department's final circularletter draft.

Department spokesman Ron Klug did not commit to any possiblechanges. He said the NYSID is considering PIANY's requests "just aswe consider any request."

The NYSID released its draft circular letter on Regulation 194–designedto provide guidance on how agents and brokers should comply withthe rule–earlier this month. The regulation, scheduled to go intoeffect Jan. 1, 2011, requires producers to disclose certaininformation about their compensation to clients.

Agent groups have opposed the rule, and two associations in thestate–the Independent Insurance Agents and Brokers of New York(IIABNY) and the Council of Insurance Brokers of Greater New York(CIBGNY)–are currently engaged in a lawsuit to prevent the regulation from takingeffect.

PIANY said it reiterated to the NYSID its longstandingopposition to the regulation at the recent meeting. But theassociation also entered into discussions on draft language changesto the NYSID's circular letter.

The association said concerns it raised include:

o Identifying which producer is required to comply with the rulewhen more than one retail licensee is involved in atransaction.

o Adding more definitive language regarding what constitutes arenewal.

o Outlining the scope of what compensation needs to bereported.

o Ensuring that direct writers' employee producers must complywith aspects of the regulation that apply to them.

PIANY said it also requested that the regulation go into effectlater than Jan. 1, 2011 "to give producers ample time to understandthe requirements of the regulation and modify their agencyworkflows and management systems to comply."

For its part, IIABNY said it submitted a letter last week to thedepartment regarding the circular letter. The NYSID said it wouldnot engage in direct discussions with IIABNY and CIBGNY because thegroups are party to a lawsuit against it. But the department didsay it would accept and consider feedback from the groups.

IIABNY said it asked the department to clarify how theregulation will apply to producers that are residents of otherstates. The group also asked the department to clarify ambiguitiessuch as the timing required for initial disclosure, and the meaningof words and phrases in the requirement for disclosure of"reasonable estimates of compensation."

IIABNY also asked the department to provide a sample disclosureproducers can use for guidance.

Tim Dodge, IIABNY spokesman, commenting on the status of thegroups' lawsuit against the department, said a judge has beenassigned to the case and that IIABNY has asked to have oralarguments begin in Sept.

He said IIABNY is waiting for the court's response to thatrequest.

The lawsuit was filed in May with the New York State SupremeCourt in Albany.