Citing concerns raised by PIA of New York, Insurance Superintendent James J. Wrynn indicated that New York’s controversial proposal for producer compensation regulations will be modified to make it easier for agents to fulfill the requirements. The state’s insurance superintendent spoke on January 19 at PIANY’s annual MetroRAP held in Brooklyn. Wrynn said the department has heard the objections from producers concerned that the disclosure notice will be an onerous business burden.

In describing what producers should expect to see in the final adopted regulation, Wrynn indicated that agents will still have to disclose their role in the sale of insurance to the consumer, but will not have to give extensive detail unless the consumer asks for more information. No disclosure will be necessary on renewals unless the consumer asks for the information within a 30-day period and agents would not be required to keep records of the disclosure notification when the insurer has the same records. The revisions are expected in mid-February, but neither the department nor the superintendent was willing to specify a date.

Earlier this month, PIANY provided formal written comments to the department reiterating its fundamental objection that any regulation to mandate disclosure would be unnecessary and an undue burden to honest insurance agents and brokers. PIANY has stated that it believes the New York State Insurance Department would be overstepping its statutory authority by imposing the regulation and that the cost of compliance would far outweigh any benefit the regulation would provide to consumers. PIANY continues to work with the industry-wide coalition it originally organized toward further modification of this proposal to address its members’ concerns.

PIANY’s formal comments to the NYSID (1/15/2010)

February 2, 2010