New York Agents’ Group Declines To Join Lawsuit Against State

By | March 25, 2010

A schism is emerging between New York’s two main trade groups for insurance agents over how best to challenge rules requiring agents to reveal their pay.

The Professional Insurance Agents of New York (PIANY) says it will not join a planned lawsuit by the Independent Insurance Agents and Broker of New York (IIABNY) against state regulators over new rules that will require agents to reveal their compensation.

PIANY President Kevin M. Ryan announced that decision in a letter to members this week. Ryan said that although the group was invited to join the suit, PIANY’s board decided against that move.

“After much analysis and consideration we have concluded that joining in the legal action is not the right thing for us to do; in fact, it is exactly the wrong thing for us to do,” he said.

Ryan gave several reasons for this logic, chiefly: PIANY’s belief that any party suing the state over the regulations would not have a seat at the table to continue negotiations. Ryan also said that none of PIANY’s legal advisers “were overly optimistic the suit will prevail.”

The decision by PIANY not to join the lawsuit was “disappointing,” said IIABNY President Richard Poppa.

“It would be better for all producers in the state if we have a unified front on this,” he said. “Their not being a part of the suit does not diminish the legal arguments, but we also don’t agree with the premise that we will automatically be excluded from future discussions.”

Poppa acknowledged that the state insurance department has said it “would be difficult” to work with any party who was suing the state over the regulations, but said told Insurance Journal he does not believe it would limit IIABNY’s ability to lobby the department about the rules.

“When all is said and done, I don’t think that they don’t want to exclude anybody from this,” Poppa said.

IABNY’s lawsuit has yet to be filed, although Poppa said the group has already taken the necessary steps to do so and expects to file the lawsuit some time before Mid-June.

Andy Mais, spokesman for the New York State Insurance Departnment, agreed that any lawsuit against the department would make working relationships “extremely difficult,” adding that “this is a consumer protection measure and we would hope that the producer community would join us to implement it, as opposed to working through the courts to try to block it.”

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