As we last discussed here, the Independent Insurance Agents and Brokers of New York (“IIABNY”) and the Council of Insurance Brokers of Greater New York (“CIBGNY”) jointly filed an Article 78 proceeding to block the implementation of Insurance Regulation 194, which requires insurance producers to disclose certain information regarding their compensation to their clients. Regulation 194 is scheduled to take effect on January 1, 2011.
In an expedited decision by the New York Supreme Court in Albany County, the Honorable Richard M. Platkin determined that the IIABNY and CIBGNY failed to demonstrate the following: (i) Regulation 194 is inconsistent with New York insurance law; (ii) the New York Legislature’s “failure to enact a statute that requires disclosure of producer compensation evinces a clear intention to preclude the Superintendent from exercising his broad regulatory powers;” (iii) the Superintendent exceeded his authority over licensed producers; and (iv) the Superintendent created a regulatory solution for a non-existent problem.
Justice Platkin noted that as early as 1998, the New York Insurance Department had issued guidance regarding producer compensation disclosure, and that as a result of the 2004 joint investigation by the New York Attorney General and New York Insurance Department into allegations of improper steering, the compensation disclosure requirements of Regulation 194 are warranted.
In determining whether to appeal Justice Platkin’s decision, the IIABNY leadership has petitioned its membership to submit their views in an online opinion poll.