IBA West “Guide to Compensation Disclosure

The IBA West “Guide to Compensation Disclosure,” includes: discussion of possible components of compensation disclosure; sample introductory clauses; sample commission disclosure clauses; sample contingent commission clauses; sample fee disclosure clauses; discussion of statements concerning client or insurer representation; sample clauses limiting the scope of services provided; sample clauses where one quote may provide greater income; sample clauses inviting customers to ask questions or request additional information; and sample concluding clauses.

“Members of IBA West have repeatedly asked for assistance in determining whether they should voluntarily provide more information to their customers, and if so, for help in drafting sample disclosure clauses for their evaluation,” said IBA West President Stan Simpson. “Its suggestions are not intended as a statement of recommended or best practices. But it does identify considerations for members to evaluate should they decide, in light of their own professional circumstances, to provide more information to their customers.”

The Guide provides a cafeteria line of options, and every agent and broker retains the right to pick and choose as many, or few, or none, of the options as they deem appropriate. “Individual brokerages and agencies are free to ignore or modify these guidelines to fit their own circumstances,” Simpson said, emphasizing the guide is completely voluntary.

Insurance Skills Center, the education arm of IBA West, also is developing and will unveil new continuing education classes on legal duties of insurance agents and brokers and compensation disclosure options in early 2006.