A new set of rules have been released by the New York Insurance Department (NYID) that requires insurance agents and brokers to release information to their clients about how they are paid. This regulation will go into affect on January 1st next year.
According to Insurance Journal, the Superintendent of NYID said in a statement that this new rule would provide clients with a clearer look at the role agents and brokers play in policy transactions and how they get paid. And, if clients request it, agents and brokers are also required to provide detailed statements on their compensation from the clients business. He also said that since everyone will buy insurance at some point in their life and because of the difficult economy, consumers have the right to know about any incentives that could be affecting the recommendations that agents and brokers are making. The Superintendent states that this new regulation is to protect the interests of the consumers but agents are not too thrilled about these changes.
The Independent Insurance Agents and Brokers of New York (IIABNY) is already stating that they plan to sue the state over these new regulations, in order to prevent the NYID from implementing them next year. They are saying that the new rule puts a burden on them for no reason. The CEO and President of IIABNY states that they have the right to protect its agent and broker members when they unanimously claim these new regulations will ultimately hurt their business. “We cannot sit back idly and let the department impose an unnecessary rule that will only serve to add another time-consuming and costly requirement for our members, which in turn could also result in additional costs to consumers,” says the CEO and President.
As of right now, the group has not officially filed a lawsuit.
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