BIG “I” SEEKS FOCUSED DISCLOSURE MODEL
Association cites need for specific proposal that targets areas of alleged wrongdoing
WASHINGTON, D.C., Dec. 9—The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest agents and brokers group, supports the stated goals and objectives of the National Association of Insurance Commissioners’ (NAIC) compensation disclosure amendment, and hopes for the emergence of a focused proposal that targets only the types of transactions in which wrongdoing has been alleged.
The association continues to support mandatory disclosure by brokers of meaningful information concerning the sources and nature of their compensation, including contingent compensation agreements, and it remains heavily involved in the ongoing negotiations over the draft amendment to the NAIC’s Producer Licensing Model Act. The latest draft of the NAIC’s proposal was released on December 5, and IIABA filed comments on that proposal today.
“This is a complex issue, and we certainly need to proceed with precision and deliberation. No one wants to deal with unintended consequences later,” says Big “I” CEO Robert A. Rusbuldt. “The final reform proposal must be real and meaningful for consumers without creating new and burdensome requirements for main street businesses that do not provide value for customers. We hope to find a happy medium in which consumers have the information they need in order to find the best product and value they deserve, yet without creating needless and costly impediments to doing business. We have seen a number of ideas that sound good conceptually, but they provide absolutely no value to the consumer in obtaining a good product, a good price, the right coverage, a sound insurer, good service, and trusted advice. We believe that focusing on areas where wrongdoing has been alleged is the proper course of action.”
The Big “I” is pleased that there is an emerging consensus revolving around broker disclosure to their clients, a concept on which it has been an early and vocal leader. The Big “I” National Board of State Directors adopted a formal policy position calling for broker disclosure prior to New York Attorney General Eliot Spitzer filing suit against Marsh & McLennan Cos. and Marsh Inc. for alleged bid-rigging.
“Our national board proactively took action urging brokers to disclose to clients the existence of incentive compensation agreements, and we are glad to see that there is growing agreement in the industry as to the wisdom of this course,” says Wesley Bissett, Big “I” senior vice president of state relations and government affairs. “The stated goals and objectives of the model law are admirable, but additional revisions are necessary in order to ensure that the concepts within it translate into true value for consumers. Where problems exist, they must be fixed, but we should not try to fix what isn’t broken. The NAIC is doing a good job of studying these important issues, and I believe most regulators understand the difference between requirements that are meaningful and offer true value to consumers and burdensome, rules that don’t benefit consumers and only impose unnecessary costs on main street businesses.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer property and casualty insurance, employee benefit plans and retirement products. Web address: www.independentagent.com.