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PIA of New York's Disclosure Language Accepted by NY Insurance Department

New York agents can use a 226-word statement written by PIA of New York to comply with compensation disclosure regulations that go into effect next...
June 9, 2010

New York agents can use a 226-word statement written by PIA of New York to comply with compensation disclosure regulations that go into effect next year. The New York Insurance Department approved the disclosure language last week; the language was developed during a series of meetings with regulators over the last month. The approval means that agents who use the PIANY-drafted language would comply fully with the primary-disclosure requirements of the regulations, which are scheduled to go into effect on January 1.

A spokesman for the New York State Insurance Department said that its legal department reviewed the document and found that it complied with the intent of the regulation. The spokesman added that PIANY is the first and only agent association to make this request and receive approval.

PIANY President Kevin M. Ryan said the association continues to object to the regulation, but is pleased with discussions it is having with the department on this issue.

PIANY said the statement satisfies the primary disclosure component of the regulation, and would be presented to policyholders -- orally or in writing -- at or prior to the time of application for an insurance contract. If the information is provided orally, however, it must also be provided in writing no later than the issuance of the insurance policy. PIANY says it will continue working with the Insurance Department to protect producers in the development additional compliance guidance by the department, particularly secondary-disclosure requirements of the regulation.

PIANY made a strategic decision to remain at the table with the New York Insurance Department on behalf of independent agents, and not join in a legal action filed May 24 by the Independent Insurance Agents and Brokers of New York (IIABNY) and the Council of Insurance Brokers of Greater New York (CIBGNY) to prevent the department from implementing a proposed producer compensation disclosure law. Parties involved such litigation are prohibited from discussing the regulation with the department.

PIA National congratulates PIA of New York for this win for independent agents.

PIANY Disclosure Letter Gets State Regulator OK (National Underwriter 6/3/10)

Primary disclosure language (PIANY)