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Big “I” Praises Introduction of Senate MLR Legislation

Bipartisan legislation is essential to preserving consumer access to agents and brokers.

WASHINGTON, D.C., Feb. 3, 2012 – The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today expressed its strong support for S. 2068, the “Access to Independent Health Insurance Advisors Act of 2012,” authored by Senators Mary Landrieu (D-La.) and Johnny Isakson (R-Ga.). This bipartisan legislation would clarify that agent compensation should be excluded from the Medical Loss Ratio (MLR) formula in the individual and small group markets.

“We are extremely grateful to Senators Landrieu and Isakson for filing this bill as it would provide agents relief from the MLR regulation which has resulted in devastating consequences for our small business members,” says Robert Rusbuldt, Big “I” president and CEO. “We urge both Senate and House leadership to quickly act on the Landrieu-Isakson legislation and the companion Rogers-Barrow legislation that is pending in the House of Representatives.”

The Patient Protection and Affordable Care Act (PPACA) established MLR requirements for insurance carriers, which went into effect on Jan. 1, 2011. The law mandates that at least 80% (individual and small group) or 85% (large group) of premiums collected by the carrier must be spent on “health care quality improvement.” In other words, no more than 20% or 15%, respectively, may go towards “non-claims costs” such as profits, advertising, administrative costs, etc. If a carrier does not meet these ratios, rebates are due to the consumer. 

The law did not statutorily address how to classify independent agent compensation under the MLR formula. However, through the regulatory process, the Department of Health and Human Services (HHS) ruled that not only was agent compensation included in the MLR formula but it was included as a part of the “non-claims costs” category. The Landrieu-Isakson legislation corrects this misguided policy decision by specifically excluding agent compensation from the MLR formula in the individual and small group markets. Reps. Mike Rogers (R-Mich.) and John Barrow (D-Ga.) have introduced similar legislation in the House of Representatives (H.R. 1206, the “Access to Professional Health Insurance Advisors Act of 2011”), which currently has 160 bipartisan cosponsors.

“If the MLR calculation is not quickly corrected to exclude agent compensation, consumers will suffer the prospect of losing the professional, licensed guidance of insurance agents during this time of great change in the health insurance market,” says Charles E. Symington, Big “I” senior vice president for government affairs. “This legislation is critical to agents and consumers alike and we thank Senators Landrieu and Isakson for their bipartisan efforts and leadership.”

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 all lines of insurance—property, casualty, life, health, 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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