January 1, 2011
2011 年 1 月 1 日纽约州保险部颁布生效的最后生产者补偿透明度规则
New York's Producer Compensation Transparency regulation was recently published in the New York State Register and is scheduled to take effect on January 1, 2011. The new rule will be less restrictive than its prior draft versions. Specifically, the earlier drafts of the rule would have required mandatory disclosure of broker and agent compensation and would have required producers to disclose to buyers whether they were representing the insurer or the buyer in a particular transaction and to provide compensation disclosures on all policy renewals. The final rule requires disclosure of the compensation amount only if the purchaser requests additional information after the initial disclosure of less specific information is made. In addition, the rules would not apply to reinsurance placements, or to placements with a captive or through wholesale brokers and managing general agents who do not have any direct contact with the insured. The rule will also not apply to renewals, except that if the purchaser requests more information about the producer's compensation less than 30 days prior to a renewal or less than 30 days after a renewal, the producer will be required to disclose to the purchaser in a prominent writing the information otherwise required in to be provided upon request from the purchaser in a new placement within five business days.
Under the final rule, producers will be required to disclose the following information orally (to be followed up with a prominent writing no later than the issuance of the insurance contract) or in a prominent writing at or prior to the time of application for the insurance contract:
1) their role in an insurance transaction;
2) whether they will receive compensation from an insurer based on the sale;
3) that compensation insurers pay to agents or brokers may vary depending on the volume of business done with that insurer or its profitability; and
4) that the purchaser may obtain more information about the compensation an agent or broker expects to receive from a sale by requesting that information from the agent or broker.
Under the final rule, if the purchaser requests more information about the producer's compensation prior to the issuance of the insurance contract, the producer shall disclose the following information to the purchaser in a prominent writing at or prior to the issuance of the insurance contract:
1) a description of the nature, amount and source of any compensation to be received by the producer or any parent, subsidiary or affiliate based in whole or in part on the sale;
2) a description of any alternative quotes presented by the producer, including the coverage, premium and compensation that the insurance producer or any parent, subsidiary or affiliate would have received based in whole or in part on the sale of any such alternative coverage;
3) a description of any material ownership interest the insurance producer or any parent, subsidiary or affiliate has in the insurer issuing the insurance contract or any parent, subsidiary or affiliate;
4) a description of any material ownership interest the insurer issuing the insurance contract or any parent, subsidiary or affiliates has in the insurance producer or any parent, subsidiary or affiliate; and
5) a statement whether the insurance producer is prohibited by law from altering the amount of compensation received from the insurer based in whole or in part on the sale.
If the purchaser requests more information about the producer's compensation after issuance of the insurance contract but less than thirty days after issuance, then the insurance producer shall disclose the above information to the purchaser in a prominent writing within five business days.
In the event that the nature, amount or value of any compensation to be disclosed by the insurance producer is not known at the time of the disclosure being made in response to the purchaser's request, then the insurance producer shall include in the disclosure:
1) a description of the circumstances that may determine the receipt and amount or value of such compensation, and
2) a reasonable estimate of the amount or value, which may be stated as a range of amounts or values.
The producer would be required to retain a copy of any written disclosure provided to the purchaser pursuant to the rule for not less than three years after the disclosure is given, unless the producer has a written agreement with the insurer that the insurer shall retain such a copy.
Click below for a copy of the final rule, in addition to a press release from the New York State Insurance Department on the matter.
For more information on this matter, please contact Spiro Bantis, Dan London or Ben Schiffman.
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