New Jersey Banking and Insurance Commissioner Holly C. Bakke has ordered 18 insurance companies domiciled in the state to submit information and documents outlining compensation and fee arrangements with their clients.
Bakke said that the 18 companies were selected in coordination with other state insurance regulators based solely on their national market share and premium volume. Her order requires that these companies provide information on compensation arrangements, terms relating to processing and payment of compensation and procedures for underwriting new business. All documentation required by the order is due within the next 60 days.
“The state will take decisive action if we find a carrier failing to meet its responsibilities to policyholders,” Bakke said.
In November, the department required New Jersey’s 30 largest brokers to provide specified information regarding compensation and fee arrangements. This information is currently being evaluated by an internal task force established by the department.
In October, the commissioner issued a bulletin which emphasized that producers who charge clients a fee must disclose any compensation arrangements with insurers to the department.
The latest order extends to all states in which the 18 companies write business. The New Jersey Department of Banking and Insurance, as well as insurance regulators from other states, are working through the National Association of Insurance Commissioners (NAIC) to ensure uniformity in the information requested, allow proper evaluation and avoid duplicative efforts.
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