BIG “I” BOARD ADOPTS POLICY ON INSURANCE COMPANY DISCLOSURE
Association urges carriers to consult with the Big “I” and agents to avoid disparate requirements
ALEXANDRIA, Va., Sept. 23, 2005—The national board of the Independent Insurance Agents & Brokers of America (IIABA) has adopted a new policy on producer compensation disclosure by carriers. The policy seeks to avoid disparate and conflicting company requirements, and to encourage carriers to consult with IIABA, its state associations and independent agents before implementing any producer compensation disclosure.
The IIABA national board adopted this policy during its meeting in conjunction with the Big “I” Convention this month in New York City.
“Insurance agents, brokers and companies all must make independent decisions about whether and how to disclose the way they are compensated,” says IIABA CEO Robert A. Rusbuldt. “We recognize this fact, and we acknowledge that everyone in the industry must take all necessary steps to comply with their legal obligations. But we also recognize that a wide range of divergent company requirements could create inefficiencies that would disrupt the way insurance agencies and brokerage firms do business, and that is what we hope to avoid.”
With respect to any insurers that choose to make their own disclosures, the national board policy encourages them to have their disclosures notify insurance purchasers that:
· The insurance policy was placed by an independent insurance agent or broker, not an employee of the company.
· The company believes it is efficient and effective to distribute its policies through independent insurance agents and brokers.
· The agent or broker placing the policy with the company may receive commission for that placement.
· If applicable, the agent or broker may be eligible to receive additional incentives.
· Any questions about the nature of the compensation should be directed to the agent or broker.
“This policy makes it clear that we fully encourage all carriers to fulfill their obligations under the law and to the public, and to do so in a way that respects the business needs of the independent agent and broker that sell their products,” says IIABA President William G. Stiglitz III, an executive with Louisville, Ky.,-based Hyland, Block & Hyland agency. “We will continue to reach out to the companies and provide them with input as they make decisions about producer compensation disclosure. Working together on this issue will help the industry and the public.”
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, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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