Boston–The National Association of Insurance Commissioners closed the door today on further tinkering to expand the reach of the broker compensation disclosure model amendment it approved late last year.
The current model amendment to the NAIC producer licensing model law requires disclosure by brokers of fee arrangements only when they are doubly compensated by both the insured and the insurer, or when brokers are said to "represent" the insured.
As a result of today's vote by the special Broker Compensation Committee, there will be no effort to expand the model to require disclosure by all producers, or even ban certain kinds of compensation.
Committee Chair Joel Ario, who is also the Oregon insurance administrator, said that in the past few months 17 bills have been introduced in 32 states on the issue, but so far only four states have passed bills.
In addition, regulations on the issue are pending in states such as California and New York.
"What has passed has been generally more limited than the NAIC," Mr. Ario said.
Meanwhile, the NAIC will continue to monitor both department and criminal investigations going on in the states regarding the issue of conflicts arising from double compensation of brokers.
The issue first came to the fore as a result of investigations by New York Attorney General Eliot Spitzer into allegations of bid-rigging by the top commercial brokerage firms, particularly the largest player, New York-based Marsh.
Since that time the four major commercial brokers have settled with their respective states and have discontinued the practice of Market Service Agreement compensation from the major insurers.
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