New York Brokers Compensation
The final version of the New York Insurance Department's regulation on producer compensation disclosure was released on February 9, 2010. The regulation will go into effect on January 1, 2011.
Summary of final regulation can be found here.
RIMS press release on the final version can be found here.
The text of the final regulation can be found here.
RIMS position on broker compensation is found here.
RIMS Executive Report on Insurance Broker Compensation can be found here.
RIMS "Let the Buyer Beware" editorial for National Underwriter can be found here.
RIMS attended roundtable discussions at the NY Insurance Department on this issue in 2009. RIMS looks forward to continuing to work with all interested parties on this issue.
On October 16th, 2008, NY Superintendent Eric Dinallo released a circular letter calling for all property/casualty insurance policies and all reinsurance contracts be finalized within thirty days of their inception. Licensees are called to strive for contract certainty in at least ninety percent of policies.
RIMS is supportive of Superintendent Dinallo's efforts. RIMS believes that contract certainty is an issue at the heart of customer service deficiencies on the part of brokers and insurers. RIMS looks forward to working with regulators and industry groups in coming to a consensus on this issue so that similar regulations can be taken up in other states. The National Association of Insurance Commissioners has agreed to make this issue a topic of discussion in 2009.
RIMS press release endorsing Superintendent Dinallo's circular letter can be found here.
The October 16, 2008 circular letter can be found here.
NAIC Proposed Property and Casualty Insurance Guaranty Association Model Act
RIMS opposed recent revisions to the Model Act which exclude employers with a net worth that exceeds $50 million from receiving guaranty fund payouts should an employer's insurers become insolvent. RIMS believes this is unfair as because these same companies indirectly pay assessments in the form of insurance premiums to insurers who are guaranty fund members.
The most recent draft of the Model Act can be found here.
NAIC Reinsurance Collateral Proposal
On December 7, 2008, the National Association of Insurance Commissioners fully adopted its Reinsurance Regulatory Modernization Framework proposal. Key elements of this proposal include:
- Establishment in the NAIC of a Reinsurance Supervision Review Department (RSRD)
- The RSRD's functions would include determination of jurisdictions eligible to be recognized as "port of entry" states.
- U.S. supervising jurisdictions for a national reinsurer or POE reinsurer would assign the reinsurer a rating which would then determine the collateral requirements on a sliding scale.
- Within two years after the first full year of operation of the new collateral requirements, the RSRD is required to reexamine the collateral requirements.
Both New York and Florida, who had proposed their own regulations, have agreed to adopt the NAIC language. The NAIC is now looking to the federal government to grant them authority to move forward with this proposal.
RIMS is hopeful that this modified regulatory framework, when fully implemented, will result in additional capacity and the equitable and efficient regulation of the reinsurance industry in a manner that meets the needs of commercial policyholders. RIMS press release on this issue can be found here.