NAIC Producer Licensing Amendment on Disclosure of Producer Compensation

On June 13, 2005, the NAIC Task Force on Broker Compensation ratified the Producer Licensing Model Act amendment it originally passed in December 2004. The Task Force does not have any immediate plans to move forward with additional language or requirements. State investigations will continue to move forward until they are completed, and we encourage our members to cooperate in full with any requests for information from their Departments of Insurance.

NAHU worked diligently to ensure that our members' needs and interests were heard and considered by the NAIC during their deliberations. We provided oral and written testimony during NAIC's quarterly meeting in early December and submitted written comments on each of the two occasions available to us.

Although a number of states have introduced the NAIC model in their state legislatures or via regulation this year, only a very few of these have passed, and none of these has gone even as far as the NAIC model language. Many departments and state legislators have expressed to us that they feel like this is a soluation in search of a problem.

On another note, the NAIC fraud reporting system is now up and running. To date it has received no complaints related to broker compensation.

Although it appears that the regulatory/legislative process relative to broker compensation is not overly active, we are hearing reports that various carriers and large agencies are eliminating or limiting contingent compensation, trips or both. We would be very interested to hear what our members are experiencing in this area. Please direct your responses to legislative@nahu.org.

Thank you for your continued support for NAHU.

• Department of Labor FAQs About 2009 Form 5500 Schedule C NEW -- The Employee Benefits Security Administration has come out with 40 questions and answers to help employers and benefits advisors apply new Form 5500 benefit plan cost reporting rules.
• Department of Labor Advisory Opinion on Broker Compensation
• Summary of State Action on Broker Compensation
• Summary of the NAIC Compensation Disclosure Amendment
• Compensation Disclosure Amendment - Adopted 12/29/04
• Final Comments regarding the Proposed Compensation Disclosure Amendment
• Comments regarding the Proposed Compensation Disclosure Amendment - Draft of 12/16/04
• Comments regarding the Proposed Compensation Disclosure Amendment - Draft of 12/05/04

For more information, please contact Jessica Waltman.

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