According to RIMS, the final regulation, represents "a 180 degree shift from previous versions, in terms of its commitment to consumer protection for renewals," RIMS added that it also contains diminished disclosure requirements for producers.

Regulators began developing the new rule in the wake of a probe by the department with the New York Attorney General's Office in 2004 that turned up evidence brokers took hidden commissions to steer commercial clients to insurers involved in a bid-rigging scheme.

"Consumer organizations have not had the opportunity to digest these additional changes and comment upon them," Scott Clark, director of RIMS External Affairs Committee and risk and benefits officer for Miami-Dade County Public Schools said in a statement.

"The previous revision had reinstated the disclosure requirements for most renewals so the reversal would appear to warrant another comment period," he said.

He continued that the intent of the rule, as it was initially presented, was to bring "greater clarity and certainty to the insurance purchase transaction in order to protect consumers. While this objective was a positive first step by the department; each subsequent revision has diluted the original intent and has resulted in the final rule that falls short of complete and mandatory disclosure, for which RIMS has been a long-time advocate."

RIMS said that if New York returns to a policy permitting contingent fees on a wide scale basis, smaller consumer entities, in particular, would be subject to a lack of complete transparency of producer compensation as a piece of the insurance purchase transaction. This, RIMS said, could give rise to the same conflict-of-interest concerns that the proposed rule was meant to address.

"While RIMS will continue its mission of educating consumers, the published rule potentially puts many at a disadvantage when dealing with producers," Mr. Clark said. "RIMS believes the department should permit another comment period so that affected parties might once again have an opportunity to be heard."

The rule, first proposed by the department on Dec. 2 and now modified, would require producers to describe their role in a transaction and how they get paid to consumers. The agent or broker would also have to provide a more detailed statement about compensation at the client's request (NU Online Feb. 9, "N.Y. Insurance Dept. Trumpets New Agent Disclosure Regulation").

When asked by NU Online if the department intends to reopen the comment period, a spokesman responded in an e-mail: "When viewed in the context of the entire regulation, and in light of the extensive process undertaken in developing the regulation for more than two and a half years, the changes made in adopting the rule do not constitute substantial revisions, because they do not materially alter the rule's purpose, meaning or effect. Therefore, the department does not intend to reopen the public comment period."