New York regulators have finalized guidelines for how agents and brokers are to reveal to clients their commissions, but at least one trade group says any changes to the rules thus far have been “underwhelming.”
The department released a new memo outlining procedures agents must follow for releasing commission information to clients, a rule set to go into effect on Jan. 1.
The memo discusses the format, timeline and the nature of information that agents and brokers must provide to their customers regarding any commission.
Agent’s trade groups in the state have all opposed the new regulations, and two of them — the Independent Insurance Agents and Brokers of New York (IIABNY) and the Council of Insurance Brokers of Greater New York — have sued the New York Insurance Department to block the rule.
The new memo, also known as a circular letter, has undergone several changes over the last several months as agents’ and other groups have lobbied for tweaks or minor changes.
Still, “the changes the department made to its initial draft of the circular are underwhelming,” said IIABNY Chair David M. Gelia. “The end product shows that the department truly does not understand how complex the task it is requiring agents and brokers to perform really is. We will continue to press the department for definitive answers to the questions we sent them last summer.”
Gelia also said that department circular letters have a history of evolving; IIABNY’s research has found that one-third of the circulars issued in the past decade have been modified or withdrawn.
Donna Chiapperino, president of the Professional Insurance Agents of New York, said the final compliance rules reflect some of the input of her trade group.
“We are pleased that the countless hours we’ve devoted in meetings with the department and in discussions with producers around the state have resulted in changes that will make compliance with this regulation substantially easier for producers,” she said.
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