NCOIL Proposes Broker Comp Model Legislation
The National Conference of Insurance Legislators has proposed model legislation aimed at curbing abuses in broker compensation that have been uncovered by New York Attorney General Eliot Spitzer.
The measure goes far beyond a comparable proposal put out by the National Association of Insurance Commissioners on Nov. 15 that focuses for the most part on disclosure.
Incoming NCOIL President Rep. Craig Eiland, D-Texas, drafted the proposal for discussion purposes only and will meet with NAIC officials at their meeting next month when the regulators proposal will be the topic of a public hearing.
In addition to full disclosure, the NCOIL measure will require any broker to have a fiduciary relationship with a client.
But the most controversial portion of the NCOIL measure calls for something akin to a suitability requirement that requires brokers to pick the best available insurance product for their client.