New York Regulation 194 Requires Agents to Disclose Compensation

  • Originally published December 22, 2010 , last updated January 6, 2016
New York Regulation 194 Requires Agents to Disclose Compensation

Effective January 1, 2011, New York Regulation 194 — “Producer Compensation Transparency” — will require insurance agents to begin disclosing:

  • Their role in the insurance transaction
  • Whether they will be paid by the insurance company or other third party based on the contract details
  • How their compensation will be affected by various contract details
  • That the insured may request information about the producer’s expected compensation for the contract

If the insured does request additional compensation information, agents are required to provide the requested compensation information in writing to the consumer within five business days.

See Regulation 194 here.

This new regulation applies to all insurance contracts, defined as “an insurance policy, surety bond, contract of guarantee or annuity contract.”

Obviously, this only applies to sales in the state of New York. But it is useful for agents in other states to take note. We are in an environment where insurance oversight is increasing.