Choosing to help craft a new compensation disclosure rule in New York with regulators versus fighting it in a courtroom, a state agents’ group said it had a “highly productive” meeting on the matter recently.

Kevin Ryan

The Professional Insurance Agents of New York (PIANY) said after its May 10 meeting with members of the New York State Insurance Department, disclosure language in the new regulation, set to take effect Jan. 1, 2011, is ready for a final review.

The most recent meeting included PIANY President Kevin Ryan and Matthew Guilbault, the group’s director of government and industry affairs, who met with NYSID Deputy Superintendent Matt Gaul and Assistant Deputy Superintendent and Counsel Paul Zuckerman.

The PIANY said in a statement that this was the fourth meeting between the two parties, this time to present regulators with a comprehensive list of questions, concerns and suggestions regarding the implementation of the new regulation, and to seek clarification on each point.

The PIANY noted that other agents’ groups have been precluded from such discussions – including the Council of Insurance Brokers of Greater New York (CIBGNY) and the Independent Insurance Agents & Brokers of New York (IIABNY) – because they have said they will file suit to stop the pending regulation, requiring all agents and brokers to disclose their total compensation if a client requests that information.

The PIANY has a commitment “to make sure that the rules being developed by NYSID are as simple and easy to comply with as possible, should the lawsuit fail to stop the regulation,” according to a statement.

Finding common ground

“All agreed that the meeting was highly productive,” Ryan said in the statement. “During the hour and a half plus meeting, we reached agreement on department-approved disclosure language as suggested by PIANY, as well as similar agreements on each of the areas of concern that we brought to the table.”

These agreements included when the regulation would require out-of-state producers to provide disclosure, how producers can identify when items they receive are based upon the sale of a policy and what is considered a renewal versus a new policy, according to the PIANY.

The agents’ group also noted its success in eliminating disclosure of a producer’s compensation on every policy, disclosure requirements for renewals unless asked and detailed disclosure of exact amounts of contingent compensation in the new rule through prior meetings with state regulators.

The NYSID will now announce and publish the agreed-upon disclosure language, the PIANY said, after it completes an internal approval process. Next, NYSID officials will draft a circular letter, offering compliance guidance for producers, incorporating the recommendations and clarifications identified by PIANY.

Once that is complete,  the PIANY said it will be invited to review the draft guidelines and return to the NYSID for further discussion and input.

“PIANY refuses to sit on the sidelines and wait for a court to decide this issue,” Ryan said. “There are still a lot of open items on this regulation that need to be determined before it goes into effect. And we’re working to make sure these requirements are as simple and non-evasive as possible. Someone needs to be at the table representing producers.”

The PIANY also has established a website for its members and others to track developments regarding the pending regulation at.