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NEW YORK—The Risk & Insurance Management Society Inc. has commended a New York appeals court for upholding a ruling requiring insurance brokers to disclose sources of compensation.
Last week's ruling by the Appellate Division of the Supreme Court of New York, 3rd Department upheld Regulation 194, which requires insurance producers to disclose their role within the sale of insurance, compensation received as a result of the sale and all other factors contributing to their compensation.
The New York Insurance Department—now part of the New York Department of Financial Services—issued the rule in early 2010. It was subsequently challenged by trade associations and insurance groups that argued that the regulation exceeded the authority of the New York insurance superintendent. It was that challenge the court ruled against last week in Matter of Sullivan Financial Group Inc. vs. Wrynn.
In a statement, Daniel H. Kugler, RIMS external affairs committee board liaison, said, “RIMS strongly believes that these disclosures will eliminate the inherent conflict of interest posed by contingent fee arrangements” and will “enhance the relationship between brokers and consumers, ultimately benefiting all risk practitioners by creating a more efficient and accurate insurance marketplace.”
ALBANY, N.Y.—A New York appeals court has upheld the state Department of Financial Services' authority to require insurance brokers to disclose the sources of their compensation.