A vote by commissioners on the proposal is expected on Dec. 29.

"Under this latest draft, potentially every insurance agent in the country would have to make some form of disclosure to their client," according to Wes Bissett, senior vice president for state affairs at the IIABA. "The latest draft is still vague, broad and subjective. It does not offer meaningful and tangible benefits to insurance buyers through greater disclosure."

The latest draft was released yesterday. Members of the NAIC Executive Committee Task Force and all commissioners plan to hold a conference call to discuss it and seek input from stakeholders on Dec. 29. The current plan is for all commissioners to vote on it that day.

The proposal is for a Compensation Disclosure Amendment to the Producer Licensing Model Act. The commissioners hope to finish work on it this year so that it can be considered next year by state legislatures, some of which convene only every other year.

However, Mr. Bissett noted, "our members and our state associations throughout the country, as well as national officials, will be in contact with NAIC prior to that conference call." The objective, he said, "is to ensure that additional revisions be made to narrow the focus of this proposal to areas where there have been problems."

Mr. Bissett said that many commissioners at the NAIC public hearing in New Orleans earlier this month, where the issue was previously discussed, said "they did not believe the model should apply to 'Main Street' insurance agents." He said "there appeared to be broad support among the commissioners at the hearing to delete Subsection B, which has not been done."

Subsection B deals with generic disclosures by agents and brokers that they will be receiving compensation from the insurer accepting the business. Mr. Bissett said that "even the first section [of the proposal] is not focused enough for me."

The producer disclosure rules will also require an insurance producer to reveal in advance to any customer from whom he receives compensation that he is also receiving some payments from the insurance underwriter with whom the producer is placing the business. The model would require the producer to get a written acknowledgment that he has told the customer of such dual compensation.

Besides the Big I, the Property Casualty Insurers Association of America voiced concern with the latest draft, while an official at the Council of Insurance Agents and Brokers said that although it will seek changes, it agrees with the latest draft in principle.

"We're still concerned about the written consent provision, especially on renewal business," said Scott Sinder, general outside counsel of the CIAB and a member of the law firm of Collier Shannon Scott in Washington. Specifically, the CIAB concern centers on language in the latest draft which calls for such prior disclosure in writing for all "placements."

Robert Zeman, senior vice president of insurance regulatory affairs for the PCI, said there are still "lingering problems" with the revised draft. Like Mr. Bissett, Mr. Zeman said the primary problem is that "the model casts a wide net that encompasses all agents and brokers and mandates costly and unnecessary disclosure requirements of every insurance producer ? brokers, captive agents, independent agents, and salaried sales representatives of direct response companies."

Mr. Zeman said the revised draft "eliminates an important exemption contained in prior drafts for ?nominal fees' paid by the insured." At the same time, the proposal provides an improved exemption for those acting as "intermediaries," Mr. Zeman said.

"The NAIC model should be flexible enough to address the variety of business models that insurers use to market their products and services to personal and commercial insurers," he said.

He added that the model legislation, "should deliver consumers valuable information that they need to make an informed purchasing decision."

Mr. Zeman said that the revised draft, "with its continuing reliance on written consent requirements, mandated disclosure of specific methods for calculating compensation arrangements and broad applicability to all insurance producers, does not meet these goals."