The Independent Insurance Agents & Brokers of America, the nation’s largest insurance trade association, has addressed its most recent concerns over the proposed Subsection (B) to Compensation Disclosure Amendment proposed to be added to the National Association of Insurance Commissioners’ Producer Licensing Model Act.
In a written letter to the NAIC’s top regulator, the IIABA stated that it “strongly opposes the addition of proposed Subsection (B).”
The letter went on to say, “The provision, which has the broadest possible scope, would impose unnecessary generic disclosure obligations on every insurance agent and broker in the country and offer questionable benefit to consumers in the process.
“No rationale, justification, or need for this subsection has been presented, and we urge the nation’s insurance commissioners to reject the application of these needless costs and burdensome new requirements to the hundreds of millions of insurance transactions that take place every year.”
The letter, written by Robert Rusbuldt, IIABA CEO, and Wesley Bissett, senior vice president, government affairs and state relations, to NAIC President Diane Koken states that proving compliance of compensation disclosure to regulators “would require fundamental changes in business operations that would likely, among other outcomes, reduce a producer’s ability to proactively respond to consumer needs.”
The IIABA states that compliance is also complicated by the fact that the proposed subsection overlaps with existing provisions in the model.
“IIABA supports efforts to establish greater transparency and disclosure in brokerage transactions, but opposes any attempt to indiscriminately burden the entire producer community with such dubious and costly requirements,” the letter states.
The model, which was completed on Dec. 29, “is already burdened by its overly broad scope, imprecise nature, and a lack of clarity – and the addition of new onerous and unwarranted provisions will only add to the challenge of securing legislative enactment at the state level,” the IIABA claims.
“The adopted disclosure amendment still needs significant clarification and revision,” the letter goes on to say.