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|Source:||A.M. Best Company, Inc.|
The ruling is a strong declaration of support for the department’s action, insurance department spokesman
Under the regulation, customers must be informed of the producer’s role in the sale, whether the producer will be paid by the insurer and also that the customer has the right to request more information in writing, such as how much money the producer stands to earn and what his or her relation is to the insurer. If the consumer asks for more information from the agent or broker, he or she must be provided a more detailed written disclosure of the compensation expected to be received as well as a description of any alternatives presented by the agent or broker and the compensation associated with those alternatives.
The regulation is scheduled to go into effect
The losing plaintiffs were among critics of a recent circular letter meant to finalize guidance for implementing the regulation. The five-page letter left a number of uncertainties, including precise definitions of the types of compensation subject to disclosure requirements and of required initial disclosures, Big I of New York President and Chief Executive Officer