The National Association of Insurance Commissioners said Thursday that it had supported model legislation for disclosure requirements that would ensure people could understand how brokers are compensated for selling insurance products.
The association, which has headquarters in Kansas City, Mo., is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia, and U.S. territories.
Its members also directed the association's executive task force on broker activities to give additional requirements - such as recognition of a fiduciary responsibility of producers, disclosure of all quotes received by a broker, and disclosures related to agent-owned reinsurance arrangements - further consideration.
Among the requirements in the model legislation, brokers would be required to disclose the amount of compensation from the insurer and the method for calculating the compensation, including any contingent payments. In cases where the contingent commission is not known, brokers would be required to make a reasonable estimate of the amount and disclose their method for calculating it.
