NU Online News Service, Aug. 18, 3:55 p.m. EDT

A New York agent association said it will continue to provide input to the state insurance department despite being excluded from groups that received a circular letter draft on the state's planned producer compensation regulation.

The department distributed to agent groups an advance copy of a draft circular letter designed to clarify how its regulation requiring compensation disclosure to clients, scheduled to take effect Jan. 1, 201, will be implemented. But left off the distribution list were the Independent Insurance Agents and Brokers of New York (IIABNY) and the Council of Insurance Brokers of Greater New York (CIBGNY).

Ron Klug, department spokesman, confirmed that the two groups did not receive a copy because they are contesting the regulation through a lawsuit, and the department feels the legal action "makes continued dialogue [with IIABNY and CIBGNY] impossible."

IIABNY and CIBGNY filed a joint legal action on May 24 to prevent the department from implementing its producer compensation disclosure rule, arguing that it is a burdensome and confusing regulation.

Richard A. Poppa, president and chief executive officer of IIABNY, said of the department's decision, "That wasn't the right thing to do, but that's [the department's] choice."

He said the association still plans to submit comments to the department regarding its views on the draft letter–which the group subsequently obtained–and he said the department has given indications that it will accept and review IIABNY's comments.

Mr. Klug said yesterday the department did receive, review and consider IIABNY's and CIBGNY's comments while developing the current draft circular letter.

Mr. Poppa said the only restriction the department has made is that the two groups cannot sit at the table with department officials. "They don't feel like they can engage in a dialogue with us" while the lawsuit is in play, he said. He added that he understands that position but does not agree.

Regarding the circular letter draft, Mr. Poppa said, "From my perspective, it starts to answer some questions, but in many ways it raises as many questions as it answers, and it still leaves us in a position where there is not clarity around a number of key definitions and requirements in the regulation."

He said the association will review the letter "line by line" and issue feedback to the department.