KANSAS CITY, Mo.--(BUSINESS WIRE)--April 17, 2006--Insurance carriers and producers face a myriad of new regulations regarding how they're compensated for their services and how they disclose that compensation. GE Insurance Solutions has developed guidance on current trends in producer disclosure requirements.
In a new white paper GE Insurance Solutions Assistant General Counsel Steven O'Hern explores the development of producer disclosure regulations from the initial NAIC and NCOIL recommendations and traces their progression through individual state actions. O'Hern notes that a growing number of states are imposing requirements on producers to disclose to their policyholders the details of their commissions when they collect a fee from the policyholder. Some states require disclosure of the amount of the commission while others require less detail.
"Compliance with these types of regulations requires extreme vigilance because legislation is just beginning to emerge," said O'Hern. "Producers don't want to be caught unaware as states impose compensation regulations individually and on their own schedule. Despite the fact that the NAIC and NCOIL have issued recommendations, each state has imposed unique requirements, so producers need to be aware of the regulations of every state in which they do business."
O'Hern developed the guidelines in response to the needs of the many producers GE Insurance Solutions utilizes in its Programs business segment. However, the guidelines also apply to any brokers who receive commissions and also charge a producer fee.
"At GE Insurance Solutions, we believe all participants in the insurance industry have an obligation to clients to maintain the highest levels of integrity and legal compliance, and this paper helps serve as a roadmap for those participants," said O'Hern.
In recognition of the broader issue of integrity and compliance, GE Insurance Solutions last year announced the formation of its "Challenge All Industry Norms" initiative, or CAIN. CAIN is built on a framework that involves identifying potential risks, taking corrective action and monitoring the risk. CAIN means anticipating changes in markets and legal environments as well as anticipating how requirements of customers and policyholders might change in the near future.
To read "Producer Compensation: New Regulations Help Guide Industry" click on http://www.geinsurancesolutions.com/erccorporate/inst/ic/lc/0603_comp1.htm (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
Steve O'Hern specializes in insurance regulatory matters and business transactions between GE Insurance Solutions and Managing General Agents, large brokerages and third party administrators. Before joining the company, he was a trial attorney representing clients in commercial litigation, construction defect litigation, personal injury matters, and insurance coverage issues. O'Hern is a graduate of the Washburn University School of Law and a member of the Missouri and Kansas Bar Associations.
GE Insurance Solutions (NYSE: GE) is a group of companies that protects people, property and reputations. GE Insurance Solutions is one of the world's leading providers of commercial insurance, reinsurance and risk management services. More information is available at www.geinsurancesolutions.com.
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