In the wake of the ongoing insurance brokerage probe involving bid rigging and incentive payments, Rhode Island Secretary of State Matt Brown is proposing legislation to prohibit insurance industry “incentive fees” and require full disclosure of all fee arrangements with insurance carriers.
He said he would also resubmit legislation to create a new independent insurance commissioner position. Currently, a superintendent within the Department of Business Regulation (DBR) oversees insurance.
The DBR has begun its own inquiries into insurer and broker practices in Rhode Island and is cooperating with the National Association of Insurance Commissioners (NAIC) nationwide effort.
Brown called upon DBR to “immediately” determine if practices as described by Attorney General Eliot Spitzer as going on in New York are occurring in the Ocean State.
“These incentive fees increase the cost of insurance, steer consumers to insurance plans that are not in the best interest of the consumer, but rather are the best financial deal for the broker, and hurt competition,” maintained Brown.
Last year, the General Assembly passed legislation creating a health insurance commissioner position to oversee the health insurance industry only. Noting that two-thirds of the states already have commissioners to oversee all areas of insurance, Brown said, “Rhode Islanders should have the same protections from insurance industry abuses that people in other states have.”
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