NY Appeals Court Upholds Broker Compensation Disclosure Rule
|By Michael Buck|
|A.M. Best Company, Inc.|
The rule, known as Regulation 194, requires insurance brokers to disclose to clients a description of their role in the sale of insurance, any compensation received because of the sale and factors that will affect their compensation. It was instituted in
Those challenging the rule, which include the
Dodge said the regulation ladens brokers with significant record keeping by requiring companies maintain quotes and alternate quotes they submit to clients, and compensation agreements, among other papers. The regulation says companies must keep these records for three years, unless there is an agreement in place for the insured to retain the records.
"We're talking about holding on to a lot of nitty-gritty details that it's quite possible no one would ever ask for," Dodge said.
In a previous defense of the appeal, the
The most recent court opinion said the rule was rationally justified as evidenced by the need for regulation after criminal bid-rigging and steering schemes involving numerous insurers and insurance producers were uncovered in
|Copyright:||(c) 2012 A.M. Best Company, Inc.|