State regulators are talking about requiring all brokers and agents to disclose all carrier payments to the insureds.[@@]
The National Association of Insurance Commissioners, Kansas City, Mo., has drafted a proposed amendment to the Producer Licensing Model Act that would prohibit “any insurance producer” from receiving any payments from a carrier unless the payment was disclosed in advance to the insured and the insured had agreed to the payment in writing, according to a preliminary draft of the proposal.
New York Insurance Superintendent Gregory Serio could unveil the proposed amendment to the model law Tuesday during a hearing on insurance brokerage practices before a subcommittee of the Senate Governmental Affairs Committee.
The proposed amendment was drafted last Thursday by a 12-member NAIC Executive Task Force on Brokerage Commissions headed by NAIC President and Pennsylvania Insurance Commissioner Diane Koken.
One section of the proposed model amendment would exempt payment of “nominal fees” from the proposed disclosure and paperwork requirements, but the model amendment does not appear to define the term “nominal.”
The proposed amendment will be the subject of a public hearing Dec. 4 at the next NAIC quarterly meeting in New Orleans. NAIC leaders want the amendment to the model law to be adopted quickly so they can push for enactment on all 50 states as soon as possible, according to a number of industry sources. Written comments will be accepted by the NAIC by Dec. 1.