The Risk and Insurance Management Society (RIMS) calls upon the New York State Attorney General's Office and the New York Insurance Department to issue new regulations to govern broker compensation.
Despite the efforts of some insurance trade groups to place the issues of broker compensation and contingent fees on the New York State legislative agenda, commercial insurance buyers-represented by RIMS and who are the primary purchasers of commercial insurance-argue that the series of hearings that took place last summer under the auspices of the state Attorney General and Insurance Department offices set the stage for developing new and critical regulations in respect to broker compensation and contingent fees.
RIMS reaffirms its position that contingent fees for insurance producers should be prohibited, and that in the absence of prohibition, all compensation arrangements should be fully disclosed to the client in writing. The acceptance of such fees in transactions that are made on behalf of the buyer represents an inherent conflict of interest. Furthermore, RIMS believes that all sources of compensation, direct or indirect, now or in the future, should be disclosed to the client whether or not it is requested.
RIMS looks forward to the release of the findings and policy recommendations made by the New York Insurance Department and Attorney General.