A trade group for New York insurance agents said it will appeal a court ruling that upheld a state regulation requiring agents to disclose the compensation they receive from insurance companies.
The Independent Insurance Agents & Brokers of New York (IIABNY) announced it will file the appeal in the next several weeks with the State Supreme Court's Appellate Division, Third Department in Albany.
The dispute is focused on New York Insurance Regulation 194, which took effect Jan 1. The rule requires insurance agents and brokers to disclose information about the commissions they receive from insurers.
The IIABNY has called on insurance agents and brokers to voluntarily disclose the nature of their compensation to clients, but has opposed mandated disclosures as burdensome and of little benefit to consumers.
The argument against mandating compensation disclosure
IIABNY and the Council of Insurance Brokers of Greater New York argued that New York state insurance law does not give state regulators the authority to make such demands. They also said the regulation is arbitrary and imposes needless compliance costs on agents and brokers. Acting Supreme Court Justice Richard M. Platkin issued an opinion Nov. 19 disagreeing on each count.
The groups filed a notice of appeal with the Third Department last December, preserving their right to formally appeal. After months of gathering new information to strengthen the case, the IIABNY board of directors voted this month to file the appeal.
"While we agree that consumers who want information about a producer's compensation should get it, we oppose this one-size-fits-all regulation that has added unnecessary paperwork and effort to producers' obligations," IIABNY Chair of the Board Christopher A. Brassard said in a press statement. "We support a system in which producers can have appropriate discussions with their customers as needed."
The IIABNY board asked the law firm of Keidel, Weldon & Cunningham LLP to finish preparing the filing. The firm expects to have the filing ready by late June or early July.