The conflict between New York insurance agents and the state’s insurance department over compensation rules took another turn this week, this time with a professional group of agents from New York City, which launched legal challenges over the latest rules requiring agents to disclose their pay to customers. The new regulation, which will go into effect on January 1, is designed to provide transparency by requiring agents and brokers to describe to consumers their role in a business transaction and how they are compensated.
The group, the Directors of the Council of Insurance Brokers of Greater New York, voted to call for an “article 78 proceeding,” an appeal to state court over the state agency's rules.
"This regulation creates an unreasonable burden on the small and mid-size insurance producer by requiring written disclosure when quoting the insurance of the role of the producer, information that the producer will be paid for selling the product, how much the producer will be paid, and a discussion of the factors that determine the amount of the compensation," Anthony Calafiore, the group's legislative chairman, said on a
The Council maintains that the latest compensation rules offer no further protection for consumers; instead, they will place a cost burden on agents, especially smaller-sized businesses.
"Many of our members are involved in family businesses, some in their second and third generation of ownership,” noted Anthony Aquilino, the Council’s president. “These businesses would not exist if they were not providing competent services and competitive premiums to their clients. There has been no clamoring by consumers for compensation disclosure, and when asked if there were any complaints against any other agents or brokers, the Insurance Department could not cite one instance of a consumer complaint."
The vote by the New York City agents is the latest in a series of disputes. As
