IIABNY claims the new rules place an undue burden upon agents for no justifiable reason and is questioning whether the department has the authority to promulgate the regulation.

PIANY President Kevin M. Ryan, in a letter to the association's agent members, said PIANY and other trade groups were invited to participate in the IIABNY lawsuit. "Certainly, since this option appears quite popular among some of our members, it would have been 'safe' for us to simply join the suit," he wrote.

But he stated that the association will not join, choosing instead to represent agent/broker interests in further discussions with the department.

Mr. Ryan said the department "has made it absolutely clear that any group or individuals who participate in an Article 78 in regard to this regulation will not be engaged in any discussions regarding the development of compliance guidelines and the Circular Letter details, which will be critical if the legal action fails."

He added that he sees the value in IIABNY filing the suit, and he added he views the divergent paths of the two agent groups as essentially a two-pronged approach with the same end goal–one group pursuing action through the courts and the other pursuing changes through discussions with the department.

"It is in the best interest of our member agents and brokers to retain our seat at that table lest nobody represent producer interests in what may well be an extremely important conclusion to years of work," said Mr. Ryan.

Stating that PIANY joining the suit would not improve its chances of success, Mr. Ryan said the court "will rule on the soundness of the argument; not the number of groups making the argument."

He further stated that PIANY consulted four attorneys who have experience with Article 78 actions and with the Insurance Department, and Mr. Ryan said that "none of those with whom we consulted were overly optimistic that the suit will prevail."

IIABNY President and Chief Executive Officer Dick Poppa said IIABNY still plans to move forward with the lawsuit, and dismissed the notion that the action may not succeed. "When our board made its decision to move forward, it was certainly aware of the odds of prevailing," he said. "But with that, our board felt like it was the right thing to do."

He also said he does not believe that the lawsuit will preclude IIABNY from continuing discussions with the department. "We don't accept premise that we won't be at the table," he said.

For its part, the department said it would be "very difficult" to have open discussions about the regulation with an entity that is party to a lawsuit against it.

Department spokesman Andy Mais said, "It is unfortunate that some have chosen to take this route."