Life groups are still asking state regulators to cut a compensation disclosure provision from a proposed amendment to the Producer Licensing Model Act.[@@]
The National Association of Insurance Commissioners, Kansas City, Mo., is developing the amendment in response to allegations by state insurance regulators and New York State Attorney General Eliot Spitzer that many customers fail to realize that brokers are being compensated both by customers and by insurers.
But a coalition of 4 life groups has sent the NAIC a letter stating that the groups will support the proposed PLMA amendment only if the NAIC removes a disclosure provision given in Subsection B of the current draft.
The groups are the American Council of Life Insurers, Washington; the Association for Advanced Life Underwriting, Falls Church, Va.; the National Association of Insurance and Financial Advisors, Falls Church; and the National Association of Independent Life Brokerage Agencies, Fairfax, Va.
The NAIC has addressed many of the groups’ concerns about an earlier draft of the amendment, but Section B continues to be an obstacle, the groups write.
Subsection B would require producers to disclose to clients prior to sales that their compensation arrangements might differ depending on the products or companies involved.