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 some producer compensation guidance language changes after a meeting was held to discuss a draft circular letter on a planned compensation disclosure regulation.

PIANY representatives met late last week with the New York State Insurance Department (NYSID), and Diane Fowler, PIANY executive director, said her understanding is that the department was "very receptive" to concerns the agent group raised.

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

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

The NYSID released its draft circular letter on Regulation 194–designed to provide guidance on how agents and brokers should comply with the rule–earlier this month. The regulation, scheduled to go into effect Jan. 1, 2011, requires producers to disclose certain information about their compensation to clients.

Agent groups have opposed the rule, and two associations in the state–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 taking effect.

PIANY said it reiterated to the NYSID its longstanding opposition to the regulation at the recent meeting. But the association also entered into discussions on draft language changes to the NYSID's circular letter.

The association said concerns it raised include:

o Identifying which producer is required to comply with the rule when more than one retail licensee is involved in a transaction.

o Adding more definitive language regarding what constitutes a renewal.

o Outlining the scope of what compensation needs to be reported.

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

PIANY said it also requested that the regulation go into effect later than Jan. 1, 2011 "to give producers ample time to understand the requirements of the regulation and modify their agency workflows and management systems to comply."

For its part, IIABNY said it submitted a letter last week to the department regarding the circular letter. The NYSID said it would not engage in direct discussions with IIABNY and CIBGNY because the groups are party to a lawsuit against it. But the department did say it would accept and consider feedback from the groups.

IIABNY said it asked the department to clarify how the regulation will apply to producers that are residents of other states. The group also asked the department to clarify ambiguities such as the timing required for initial disclosure, and the meaning of words and phrases in the requirement for disclosure of "reasonable estimates of compensation."

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

Tim Dodge, IIABNY spokesman, commenting on the status of the groups' lawsuit against the department, said a judge has been assigned to the case and that IIABNY has asked to have oral arguments begin in Sept.

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

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

Special Reports /

N.Y. Agent Group Optimistic On Further Producer Comp. Clarification

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