Producer Compensation Disclosure Moves Forward in New York

The New York State Insurance Department published the final version of its disclosure regulation in the New York State Register on February 10.

Under the regulation that goes into effect January 1, 2011, producers operating in New York State must, among other requirements, disclose to clients their role in the insurance transaction and whether they will receive compensation from an insurer based on the sale. Further information about the nature, amount and source of that compensation must be disclosed to clients upon request.

NAIFA-New York State, NAIFA and AALU will continue to work with interested parties in New York and with the NYSID in efforts to make this bad situation better. We will be drafting a “circular letter” which will hopefully be adopted by the department in conjunction with the formal effective date of the regulation which would clarify that some of the requirements of the regulation can be met with generic compensation information.

An Article 78 proceeding challenging the authority of the Department to promulgate the regulation is still being considered by most of the interested parties. The proceeding must be brought within 120 days of the filing (Feb.10).

NAIFA Staff Contact: Ron Panneton, Senior Counsel – State Government Relations, at (703) 770-8187.