The National Association of Insurance Commissioners has closed the door on further efforts to expand the reach of the broker compensation disclosure model amendment it approved in 2004.[@@]

The current model amendment to the NAIC producer licensing model law requires disclosure by brokers of fee arrangements only when brokers are compensated by both the insured and the insurer, or when brokers are said to “represent” the insured.

As a result of vote by the NAIC’s special Broker Compensation Committee, there will be no effort to expand the model to require disclosure by all producers, or even to ban certain kinds of compensation.

In the past few months ,17 bills have been introduced in 32 states on the issue, but so far only 4 states have passed bills, according to Joel Ario, chairman of the broker compensation committee, who is also the Oregon insurance administrator.

In addition, regulations on the issue are pending in states such as California and New York.

“What has passed has been generally more limited” than what the NAIC has proposed, Ario says.

Meanwhile, the NAIC, Kansas City, Mo., will continue to monitor state investigations focusing on conflicts arising from double compensation of brokers, Ario says.

The issue first came to the fore as a result of investigations by New York Attorney General Eliot Spitzer into allegations of bid-rigging by the top commercial brokerage firms, particularly the largest player, Marsh & McLennan Companies Inc., New York.

Since that time, the 4 major commercial brokers have settled with their states and have discontinued the practice of collecting market service agreement compensation from the major insurers.