N.Y. BILL IMPOSES FIDUCIARY DUTY:

Assemblyman Ryan Scott Karben (D/I-Rockland), a majority member of the New York State Assembly’s Insurance Committee, has introduced a legislative package on agent and broker compensation that would require disclosure and impose a standard of “reasonable care” upon producers for the first time. The proposal mandates that producers have a duty to exercise reasonable care in obtaining the best terms possible for their clients. Another section permits certain profit sharing arrangements between insurers and producers. A third provision requires that insurance agents and brokers avoid any conflict of interest, self-dealing and excessive compensation. In addition, all insurance agents and insurance brokers would be required to disclose to all clients or potential clients the existence and nature of all compensation. The failure to disclose compensation received would be a violation of the fiduciary duty. “This legislation will restore a sense of accountability and transparency to the insurance industry and re-establish consumer confidence in this economically vital industry,” said Karben.

Topics Agencies New York