N.Y. Agent Associations Get Compliance Form OK

NU Online News Service, Dec. 20, 4:00 p.m. EST

New York State's two major producer groups said they have received approval from the State Department of Insurance for their model forms that member agents and brokers can use to comply with New York's new disclosure requirements.

The Independent Insurance Agents & Brokers of New York (IIABNY) and the Professional Insurance Agents of New York (PIANY) said they received approval last week from the insurance department.

IIABNY said its forms, approved Dec. 16, have minor editorial changes from the forms agents received during the 15 live seminars and four webinars the association has held since July.

"These model disclosure notices are part of IIABNY's inclusive approach to both fighting this regulation and preparing members to comply with it," said IIABNY Chairman of the Board David M. Gelia in a statement. "We will be better able to guide our members now that the insurance department has agreed that our model language meets the regulation's requirements."

PIANY said it received approval for its secondary forms, which it said are simple fill-in-the-blank forms for agents to use.

The forms fulfill the requirements of Regulation 194, the mandatory disclosure regulations taking effect Jan. 1. Under the insurance department's new regulation, the agent or broker must disclose the nature of their relationship with the insurance company and inform the customer that they receive compensation from the company including contingent commission.

Should the customer request additional information, the producer will have to release more detailed information about the nature of the compensation.

The new regulation has been criticized by both organizations, but while PIANY worked with the insurance department to iron out issues over compliance, IIABNY sued the insurance department in hopes of ending implementation of the disclosures.

In November, a state Supreme Court judge ruled he would not stop the regulation from going into effect come Jan. 1. IIABNY said it has not decided yet if it will appeal the judge's decision.