New York Compensation Disclosure is Here
December 3, 2010 by Sheryl J. Moore
ATTENTION AGENTS AND FMOS DOING BUSINESS IN NEW YORK!
New York insurance agents need to be aware of the new compensation disclosure rules (Regulation 194) that take effect January 1, 2011.
It is important to note that this regulation is not only for those who SELL IN New York. This impacts all insurance agents licensed to do business in New York, whether it be through a resident or non-resident license, whether you live in New York or not.
The National Ethics Bureau gives the following reminders regarding the regulation in this month’s Senior Market Advisor:
Regulation 194 requires producers at or prior to the time of insurance application to disclose the following to the buyer:
a. A description of the producer’s role in the sale.
b. Whether the agent will receive compensation from the insurance company or a third party.
c. That the buyer may request more detailed information about the producer’s compensation.
Should the buyer request more information, the producer must disclose:
a. The nature, source and amount of the compensation.
b. Descriptions of alternative insurance quotes and how much the agent would have received in compensation if the buyer had chosen one of them.
c. A statement about whether the law permits the producers to change the amount of compensation he recieves for a sale.
Additional regulation often means growing pains, but remember that this doesn’t have to be a negative issue in the sales process. Your clients know you are paid to sell them insurance products, just as a real estate agent is paid to sell them a house. Find a way to openly communicate the compensation with the client up-front and you’ll have less growing pains due to Reg 194.