Then the department will have no problem with us charging fees where the compensation is inadequate for the services rendered? Presently in NJ you need a signed agreement and can’t charge fees where acting as an agent. That assumes we make money on all transactions which simply isn’t the case.
I love how they speak as if there’s nothing to be concerned about. Fact is this, there’s not problem with disclosure. There’s a problem with the deliberately vague guidelines of the law that basically leave us open to the interpretation by whomever is in charge at the time. That makes it possible for the insurance department to pick and choose who and how they are going to fine and they can change the rules as they go along to suit themselves. They fail to mention that most policies already have a producer comp disclosure built into them and that there have been ZERO complaints by consumers on this issue. This is clearly just another revenue generator for NYS at the expense of hardworking agents who are doing right by our clients.
I agree with both “Ins Girl NY” and “Compensated”. This whole issue was conceived following the scandal involving large, national brokers who negotiated and received placement contingencies, in addition to commissions, for simply selling a company’s policy. By contrast, our profit-sharing agreements depend on a number of factors, loss experience being one of them, and any compensation from them is not guaranteed. Moreover, if we are asked to provide additional information about compensation, I defy anyone to figure out how a profit-sharing formula would apply to any single policy and worse yet, that of several insurers, if a number of quotes were obtained.
In developing this regulation, the Ins. Dept. assumes that agents are inherently dishonest, although they never worded it quite that way. (A lot of people are dishonest and there are laws to deal with them.) And they simply ignored two important factors: 1)the reality that we live in a competitive environment that drives prices downward and customers are not obligated to do business with any of us, and 2) there has been no ground-swell from the public sedeking information about our compensation, which most of us would freely give, if asked, anyway.
Like NJ, we in NY also have to obtain written agreement for any fee we charge but only when acting as brokers, but we are prohibited by law from charging any fee where we are agents for the company writing the policy on which we earn a commission. So, with this regulation, the state is essentially imposing unrecoverable costs on us.
As stated before, the problem was the national brokers, namely Marsh, that was caught charging a fee and then getting a bonus, not contingent commission amounting to at least 10% of the premium.
That probably is greater than the average commission on a commercial account that is earned by the typical agent.
Too bad they didn’t limit the total disclosure to those brokers working on a fee basis.
Well put Rusty. A few big guys mess up and they make it sound like we are all doing shady deals. What about other industries that make a living off of commissions?
If we do the initial disclosure and they happen to ask, What % to you get on my policy?” We are then obligated to give a FULL written disclosure. In some cases this could include a simple contest that we may or may not win because it is based on a random drawing of any agent who submitted a new app. Also the fact that we may or may not get any profit sharing based on loss experience and or yes, many of us don’t actually get the profit sharing as it goes to the agency corporation, not the individual agent. Where do we draw the line and how much extra time could this take. Exactly how many consumer complaints a year have they been getting to necessitate this?
Then the department will have no problem with us charging fees where the compensation is inadequate for the services rendered? Presently in NJ you need a signed agreement and can’t charge fees where acting as an agent. That assumes we make money on all transactions which simply isn’t the case.
I love how they speak as if there’s nothing to be concerned about. Fact is this, there’s not problem with disclosure. There’s a problem with the deliberately vague guidelines of the law that basically leave us open to the interpretation by whomever is in charge at the time. That makes it possible for the insurance department to pick and choose who and how they are going to fine and they can change the rules as they go along to suit themselves. They fail to mention that most policies already have a producer comp disclosure built into them and that there have been ZERO complaints by consumers on this issue. This is clearly just another revenue generator for NYS at the expense of hardworking agents who are doing right by our clients.
I agree with both “Ins Girl NY” and “Compensated”. This whole issue was conceived following the scandal involving large, national brokers who negotiated and received placement contingencies, in addition to commissions, for simply selling a company’s policy. By contrast, our profit-sharing agreements depend on a number of factors, loss experience being one of them, and any compensation from them is not guaranteed. Moreover, if we are asked to provide additional information about compensation, I defy anyone to figure out how a profit-sharing formula would apply to any single policy and worse yet, that of several insurers, if a number of quotes were obtained.
In developing this regulation, the Ins. Dept. assumes that agents are inherently dishonest, although they never worded it quite that way. (A lot of people are dishonest and there are laws to deal with them.) And they simply ignored two important factors: 1)the reality that we live in a competitive environment that drives prices downward and customers are not obligated to do business with any of us, and 2) there has been no ground-swell from the public sedeking information about our compensation, which most of us would freely give, if asked, anyway.
Like NJ, we in NY also have to obtain written agreement for any fee we charge but only when acting as brokers, but we are prohibited by law from charging any fee where we are agents for the company writing the policy on which we earn a commission. So, with this regulation, the state is essentially imposing unrecoverable costs on us.
As with most regulatory authorities, they deal with the regulated as though they are all corrupt; because they are corrupt.
As stated before, the problem was the national brokers, namely Marsh, that was caught charging a fee and then getting a bonus, not contingent commission amounting to at least 10% of the premium.
That probably is greater than the average commission on a commercial account that is earned by the typical agent.
Too bad they didn’t limit the total disclosure to those brokers working on a fee basis.
Well put Rusty. A few big guys mess up and they make it sound like we are all doing shady deals. What about other industries that make a living off of commissions?
If we do the initial disclosure and they happen to ask, What % to you get on my policy?” We are then obligated to give a FULL written disclosure. In some cases this could include a simple contest that we may or may not win because it is based on a random drawing of any agent who submitted a new app. Also the fact that we may or may not get any profit sharing based on loss experience and or yes, many of us don’t actually get the profit sharing as it goes to the agency corporation, not the individual agent. Where do we draw the line and how much extra time could this take. Exactly how many consumer complaints a year have they been getting to necessitate this?