A trade group representing 1,800 independent insurance agencies in New York said it worries about how the state’s proposed broker disclosure rule might apply to out-of-state insurance agents.

The request for clarification on that issue is one of four sought by the Independent Insurance Agents & Brokers of New York. The trade group sent formal comments to the New York Insurance Department in response to a draft bulletin pertaining to the department’s new regulation on disclosure of insurance producer compensation. The department posted the bulletin, also known as a “circular letter,” on its website earlier this month and sought public comment by Sept. 3.

In its formal comments, the IIABNY said it also wants to know when the disclosure rules will apply to producers who live outside of the state. New York’s rules could be more onerous than most other states, and several states have indicated a willingness to follow New York’s lead in seeking greater reporting of commissions and fees paid to insurance brokers.

The group also requested that state regulators define “key phrases” in the regulation to clarify the specific compensation subject to disclosure, the precise timing of the required initial disclosure, the specific coverage details subject to the optional second disclosure, and to clear up other ambiguities.

By providing a sample disclosure, the group suggested that state officials may be able to illustrate how a producer should disclose compensation for the sale of multiple policies to the same client.

The IIABNY also wanted additional clarification about the meanings of certain words and phrases in the requirement for disclosure of reasonable estimates of compensation.

New York Insurance Regulation 194, Producer Compensation Transparency, requires producers to disclose certain information about their compensation to all clients, regardless of whether the clients have requested it. Should any client request more information, the regulation requires the producer to provide detailed information about his compensation for the policy sold and the compensation he would have received had the client chosen a different policy.

IIABNY, which pointed out in a statement that in 2004 it called on insurance agents and brokers to voluntarily disclose to their clients all compensation, and the Council of Insurance Brokers of Greater New York (CIBGNY) have opposed mandated disclosures as “burdensome for producers and of little benefit to consumers.”

After the department adopted the final version of the rule last winter, IIABNY and CIBGNY filed legal action on May 25 to block its implementation.