The NAIC has adopted model legislation that would implement new disclosure requirements designed to ensure consumers are provided the information necessary to understand the manner in which brokers are compensated for the sale of insurance products. The model legislation amends the NAIC's current Producer Licensing Model Act and is a key component of an aggressive initiative by state insurance regulators to address issues surrounding the use of compensation arrangements by insurance brokers.
During a conference call of its membership, commissioners also directed the NAIC Executive Task Force on Broker Activities to give further consideration to the development of additional requirements, such as recognition of a fiduciary responsibility of producers, disclosure of all quotes received by a broker, and disclosures relating to agent-owned reinsurance arrangements.
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