New York state officials plan to hold 3 fact-finding hearings on agent and broker compensation arrangements this month, officials say.
The New York State Insurance Department and state Attorney General Andrew Cuomo will hold joint hearings July 14 in Buffalo, July 13 in Albany and July 25 in Manhattan.
The hearings will cover contingent and supplemental commissions, producer compensation disclosure, and deceptive or anti-competitive practices, according to New York insurance regulators.
The hearings stem from 2004 investigations into allegations that some insurance brokerage firms may have steered contracts to favored insurers in exchange for contingent commission payments, without disclosing the contingent commissions to clients, officials say.
The hearings are designed to get the views of all interested parties on the proposed addition of a regulation that would govern broker compensation and disclosure, officials say.
“Those who sell insurance deserve to be fairly compensated, and those who buy insurance deserve to be fairly treated,” Insurance Superintendent Eric Dinallo says in a statement. “These hearings will help us understand how best to ensure the marketplace is competitive, transparent and fair to all.”
The New York department “wants to hear views about whether agents, brokers and all other insurance producers should be required to make full disclosure to the insured and obtain consent in writing for any compensation from an insurer, or other entity relating to the issuance, renewal or servicing of the insured’s insurance policy or annuity contract,” Dinallo says.
Dinallo and Cuomo also are seeking views on contingent commissions and whether such compensation creates an irreconcilable conflict of interest for producers, officials say.
Regulators want to know to what extent contingent, supplemental and flat percentage commissions are currently leading to steering or other deceptive or anti-competitive practices in the marketplace, and to understand what mechanisms are most effective in curbing such practices, officials say.