New York Modifying Agent Disclosure Rule

NU Online News Service, Jan.28, 3:50 p.m. EST

BROOKLYN, N.Y.–New York's controversial proposal for producer compensation regulations will be modified to make it easier for agents to fulfill the requirements, the state's insurance superintendent said.

Speaking to agents and company representatives today at the Professional Insurance Agents of New York annual MetroRAP meeting here, Superintendent James J. Wrynn said the department has heard the objections from producers concerned that the disclosure notice will be an onerous business burden.

Mr. Wrynn said that agents will still have to disclose their role in the sale of insurance to the consumer, but will not have to give extensive detail unless the consumer asks for more information.

On renewals, no disclosure will be necessary unless the consumer asks for the information within a 30 day period.

Finally, on the issue of documentation requiring agents to keep records of the disclosure notification, he said those records will not have to be held by agents for a three year period when the insurer has the same records.

He said these revisions will be coming out soon, but gave no date.

"It's not perfect," he said, but the proposed regulations fill the need for minimum disclosure to consumers.

"I can honestly state, without equivocation, that you cannot have lesser disclosure standards than this and call it disclosure," said Mr. Wrynn.

He went on to say, "I think this provides the balance of providing the consumer with the disclosure, while at the same time not being overly burdensome to the producer."

The initial proposal for disclosure regulation has been heavily criticized by the Insurance Agents and Brokers of New York, which has raised the threat of a lawsuit.

During a question and answer period, some agents indicated that they felt more could be done to make the disclosure rules even less of a burden. One asked why the disclosure statement could not simply be made a piece of the declaration page to prevent additional paperwork for agents.

Mr. Wrynn countered, saying he felt that what is being put forward is the least burdensome form of regulation that is user friendly and fair to all producers.

Touching on the proposal to recreate the New York Insurance Exchange, Mr. Wrynn said he met with 75 chief executive officers from insurance companies and investment banking firms recently who wanted to hear about the proposal and to form working groups aimed at developing the program, which would resemble that of Lloyd's of London.

He said there was almost universal approval for the idea and almost all of the attending chief executives said they would serve on one or two of the working groups.

There will be more word about the exchange as matters progress, he added.

In his remarks, he stressed the desire of the department to work with insurers and producers and to be open to their input on the issues. He said his priority is to have more dialogue and to work together.

Mr. Wrynn added that he wants to see New York become the place where insurers try new and innovative insurance solutions without feeling they need to try them elsewhere first.