Insurance regulators are preparing for a public hearing on broker compensation.[@@]
The National Association of Insurance Commissioners, Kansas City, Mo., expects to take up the topic Saturday, at the NAIC’s winter meeting in New Orleans.
The hearing will cover a plan that a group of commissioners developed in response to broker comp investigations conducted by the attorneys general in New York, Connecticut and other states.
The attorneys general began their investigations by looking at allegations of bid-rigging and other problems in the commercial property-casualty insurance market, but the investigations have expanded to include the employee benefits market.
Commissioners are asking carriers for information about commissions and bidding practices.
The commissioners also want to amend guidelines in the NAIC Producer Licensing Model Act and to establish a consumer outreach program that would take complaints about potential abuses.
Hearing organizers are expecting speakers to include representatives of the American Council of Life Insurers, Washington; the National Association of Independent Financial Advisors, Falls Church, Va.; the National Association of Mutual Insurance Companies, Indianapolis; and, the Property Casualty Insurers Association of America, Des Plaines, Ill.
Reactions to the hearing and the broker comp issue:
- Bruce Ferguson, ACLI senior vice president-state relations: Ferguson talks about the scope of the NAIC’s reform plan, which covers all lines and types of insurance. A one-size-fits-all approach can be very complicated because of the different ways that insurance is sold in the property-casualty and life insurance markets and the different types of producers who sell the products, Ferguson says.
The ACLI is encouraging the NAIC to focus on the “fact pattern” in the investigations conducted by California Insurance Commissioner John Garamendi and New York Attorney General Eliot Spitzer, Ferguson says.