New York independent insurance agents are not too happy that Zurich Financial Services has decided to implement nationwide the stricter of two agency compensation disclosure policies it signed as part of recent settlements with various states.
According to the Independent Insurance Agents and Brokers of New York, Inc. Zurich officials recently confirmed to them that Zurich would disclose to insureds before binding a policy the standard commission it pays for each type of policy. That disclosure policy flows from a class action settlement Zurich signed with the attorneys general of 12 states over charges of improper transactions with large insurance brokers.
The compensation disclosure provisions in that 12-state agreement are stricter than those of a second class action settlement Zurich signed with Connecticut, Illinois and New York. This tri-state agreement does not call for pre-binding disclosure of specific commissions, as does the 12-state agreement.
According to IIABNY officials, who said they requested a meeting with Zurich, company officials informed them they plan to enforce the stricter disclosure rule in all states despite the less restrictive agreement with Connecticut, Illinois and New York.
“The association’s officers, staff and legislative representatives were disappointed to learn that Zurich, for reasons of consistency and expense, plans to implement the more restrictive nine-state settlement across the country,” IIABNY said in a statement.
IIABNY would prefer that Zurich use the tri-state agreement. The group said that the 12-state agreement is “far more onerous and intrusive.”
Keith Owen, Zurich spokesman, told Insurance Journal that the company has previously notified its more than 18,000 producers in a letter about its plans to implement the same disclosure policy in all states. “We believe in transparency,” he said, explaining that the company could not justify having one policy for most of the country and a separate one for Connecticut, Illinois and New York.
He said the company is also working to satisfy the terms of both agreements to provide additional compensation information and should have a web site for that purpose up-and-running before the September deadline.
Owen declined to respond specifically to IIABNY’s statement.
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