NU Online News Service, Jan. 8, 3:42 p.m. EST
The Independent Insurance Agents and Brokers of New York said the top issues on their legislative agenda this year are opposition to proposed producer disclosure regulations and changes to the state's workers' compensation system.
The agent association has been waging a heated battle against the state insurance department's proposed compensation regulation, which was developed in response to a 2005 New York Attorney General's investigation revealing that some commercial insurance brokers took hidden payments to steer clients to insurers involved in a bid-rigging scheme.
The department, in its published rule, states, "The proposed regulation is intended to provide a means to address the potential conflict that arises due to the differences in the amount of compensation an insurer pays to its producers in the least invasive manner possible–by requiring that insurance producers make certain disclosures about their role in the insurance transaction and compensation arrangements with insurers to insurance customers."
In a statement last month, IIABNY said it disagreed with mandatory disclosure, and threatened a lawsuit if the department moved forward.
The association particularly took issue with a requirement in the rule stating that a producer must disclose his or her role–whether the producer is legally representing the insurer or buyer in a transaction. The organization said this requirement adds no value, and could be confusing to the buyer.
IIABNY said in its 2010 position paper that it "will continue to oppose the proposed compensation disclosure proposal and urge adoption of a voluntary disclosure standard."
On workers' compensation, IIABNY said it would like to see legislation eliminating what it says are competitive advantages of the quasi-public New York State Insurance Fund (NYSIF).
Michael Barrett, legislative representative for IIABNY, said one advantage is a requirement that anyone who wants to cancel a NYSIF policy must give a 30-day notice. NYSIF uses that window, Mr. Barrett said, to attempt to retain the business. There is no 30-day requirement in the private sector, he noted.
Mr. Barrett said he would like to see NYSIF regulated like a private insurer.
IIABNY said it would also like to see the state repeal Sections 240 and 241 of the New York State Labor Law–the so-called "Scaffolding Law." IIABNY said the sections establish an "absolute liability" standard on contractors or property owners for a fall from any height by an employee, regardless of fault.
Mr. Barrett said because of this law, contractors do not have the ability to defend themselves even if the employee fell because of drinking or drug use. However, Mr. Barrett said he does not know if there will be appetite to tackle this issue because it is an election year.
Other initiatives IIABNY plans to pursue include:
o Support for a federal catastrophe fund to stabilize the coastal homeowners market.
o Standardization of triggers for windstorm deductibles to reduce confusion among consumers in the event of a storm.
o Reforms that would allow brokers to place coverage in the excess lines market when the premium offered by a licensed insurer is 25 percent or more above that offered by the excess line insurer.
o Strengthening laws to combat automobile no-fault insurance fraud.
o Elimination of separate agent and broker licenses and replacement with a single producer license.
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