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Big "I" Recognizes NAIC Efforts, Seeks Further Clarity


Association sees several issues in draft model that still need to be addressed


WASHINGTON, D.C., Dec. 29 - The Independent Insurance Agents & Brokers of America (the Big “I”), the nation’s largest agents and brokers group, today credited the National Association of Insurance Commissioners’ (NAIC) for its hard work on a compensation disclosure model law, but called for further discussion of several outstanding issues.


The new model, which was approved by a vote of 31-15 (with two abstentions) by the commissioners, would establish new and unprecedented consent and disclosure obligations for many insurance producers and greatly enhance the transparency within the insurance industry. The goal of the model was to require enhanced disclosure by brokers of meaningful information concerning the sources and nature of their compensation, including contingent compensation arrangements, an objective supported by the Big “I.” 


Although the Association believes the model was improved with the revisions included by the regulators in recent days, IIABA still believes a number of real-world business application issues need to be addressed. Among issues still of concern to the Association are: 1) improving the distinction between brokers and insurance agents; 2) ensuring that the consent and disclosure requirements are sensible and reasonable and can be achieved by those to whom they apply; 3) clarifying that the model does not apply to renewal and residual market business; and 4) addressing several technical issues.


“We give much credit to the NAIC for its work and its desire to protect insurance consumers,” says Big “I” CEO Robert A. Rusbuldt. “It is good that the final version of the model includes changes that are more relevant to consumers and more practical from a business application perspective. The NAIC has quickly and proactively responded to problems brought to light by the New York Attorney General Eliot Spitzer and the New York Insurance Department. Although additional work will be needed on the model, we share the ultimate goal of the NAIC, which is to produce disclosure that is of value to consumers.”


The NAIC’s adoption of the model is only the first step in a multi-step process, and the debate now shifts to the state legislative level. The Big “I” intends to work closely with those state legislatures that choose to examine the issue to ensure that the product actually enacted into law is effective for consumers and reasonable for those that must comply with its requirements.


“We look forward to working with state regulators, individual commissioners and the NAIC on a number of issues, with a focus on those matters that continue to be problems,” says Wesley Bissett, Big “I” senior vice president of state relations and government affairs. “Any reforms to be made must help consumers obtain meaningful, relevant, and understandable information, yet do so without creating needless and costly impediments to doing business.”


The Big “I” has been pleased with the consensus that has emerged around brokers’ disclosure to their clients, a concept on which it was an early and vocal leader. The Big “I” National Board adopted a formal policy position calling for broker disclosure prior to Attorney General Eliot Spitzer filing suit against Marsh & McLennan Cos. and Marsh Inc. for alleged bid-rigging.


“We have said from the beginning that brokers should disclose to their clients the existence of incentive compensation agreements, and we support the goals of the NAIC model law,” says Bissett. “These objectives are laudable, but further discussion is needed to help ensure that they create value for consumers without adding onerous provisions that needlessly burden Main Street businesses. We believe most policymakers will recognize the difference between meaningful requirements benefiting consumers and burdensome rules that impose unnecessary costs on Main Street businesses without providing real value to consumers.”


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:



​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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