The Independent Insurance Agents & Brokers of New York (IIABNY) says it is moving forward with a legal appeal of a court ruling that forced agents in the state to reveal their commissions to clients.
The group plans to file the appeal with the State Supreme Court’s Appellate Division, Third Department in Albany within the next several weeks.
“Regulation 194 is a costly and unnecessary burden on law-abiding insurance agents and brokers. We are going to appeal the ruling because our members expect us to and because it is the right thing to do,” IIABNY President and CEO Richard A. Poppa said.
At the center of the issue is New York’s Regulation 194, a long-contested regulation aimed at increasing “transparency” in insurance transaction. The legislation — which traces to the last decade’s lawsuits over bid-rigging, steering and the use of contingent commissions — went into effect in January.
Now, New York agents are required to tell their clients how much they are paid for a particular transaction.
Last year, IIABNY and CIBGNY partnered to sue the state and try to stop the regulation from going forward, claiming that the insurance department lacked the authority to make the regulation. In November, a court sided with state regulators.
IIABNY filed a notice of appeal — essentially, the right to appeal in the future — in December, but has has remained quiet about its legal strategy since then.
Recently elected IIABNY Chair Christopher A. Brassard said that the group “is continuing the fight against this unfair regulation. Our members deserve no less. While we agree that consumers who want information about a producer’s compensation should get it, we oppose this ‘one size fits all’ regulation that has added unnecessary paperwork and effort to producers’ obligations. We support a system in which producers can have appropriate discussions with their customers as needed.”
IIABNY’s law firm, Keidel, Weldon & Cunningham, should finish preparing the filing by late June or early July, the group said.
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