The regulation would take the form of an amendment to the Producer Licensing Model Act.

It comes on the heels of investigations into brokerage and insurer practices by the New York attorney general's office and insurance department.

These probes have led to lawsuits filed against property-casualty and health sectors by New York Attorney General Eliot Spitzer alleging that brokers, rather than seeking the best deal for clients, steered business to insurers in exchange for payoffs disguised as fees and commissions.

New York Insurance Superintendent Gregory Serio could unveil the proposed amendment during today's hearing on insurance brokerage practices before a subcommittee of the Senate Governmental Affairs Committee.

The proposed amendment was drafted last Thursday by a 12-member NAIC Executive Task Force on Brokerage Commissions headed by NAIC President and Pennsylvania Insurance Commissioner Diane Koken.

One section of the proposed model amendment would exempt payment of "nominal fees" from the proposed disclosure and paperwork requirements, but the model amendment does not appear to define the term "nominal."

The proposed amendment will be the subject of a public hearing Dec. 4 at the next NAIC quarterly meeting in New Orleans.

Industry sources said NAIC leaders want the amendment to the model law to be adopted quickly so they can push for enactment by all 50 states as soon as possible. Written comments will be accepted by the NAIC by Dec. 1.

The amendment states any insurance producer "or any business entity related to such producer" would be covered by the model law.

Under the proposal, any producer entitled to receive commissions from an insured would not be allowed to do so unless the producer has received written consent from the insured stating "that such compensation will be received by the producer or business entity related to the producer," according to the draft of the proposed amendment.

Additionally, the proposed model law says, the producer must disclose to the insured the amount of compensation the producer is receiving from the insurer as well as the method for calculating such compensation, including any contingent compensation.

"If the amount of contingent compensation is not known at the time of disclosure, the producer shall disclose a reasonable estimate of the amount and method for calculating such compensation," according to the amendment draft.

The proposed model law also would require an insurance producer to disclose the following information to an insured or prospective insured, prior to the purchase of insurance:

? That the producer will receive compensation from the insurer for the sale.

? That the compensation received by the producer may differ depending upon the product and insurer.

? That the producer may receive additional compensation from the insurer based upon other factors, such as premium volume placed with a particular insurer and loss or claims experience.