New York writing agents: Compensation disclosure is here

Regulation 194 requires producers at or prior to the time of insurance application to disclose the following to the buyer:

• A description of the producer’s role in the sale.
• Whether the agent will receive compensation from the insurance company or a third party.
• That the buyer may request more detailed information about the producer’s compensation.

Should the buyer request more information, the producer must disclose:

• The nature, source and amount of the compensation.
• Descriptions of alternative insurance quotes and how much the agent would have received in compensation if the buyer had chosen one of them.
• A statement about whether the law permits the producers to change the amount of compensation he receives for a sale.

The regulation applies to agents required under New York law to hold a license to sell, solicit or negotiate insurance. This means it affects both New York residents and residents of other states who hold New York nonresident licenses.