PCI SEEKS CHANGES TO PROPOSED RULE ON PRODUCER COMPENSATION IN OREGON:

The Property Casualty Insurers Association of America (PCI) has voiced its general support of the Oregon Insurance Division’s effort to establish an objective way to determine when an insurance broker must make disclosures regarding compensation from someone other than the insured. The proposed rule would impose disclosure requirements when an insurance broker charges a prospective insured a fee or commission. “An insurance broker who charges a fee or a commission to a prospective insured should be responsible for providing the insured with basic information about the charges,” said Sam Sorich, vice president and western regional manger for PCI. “While we believe the focus of the proposed rules is correct, they specify disclosure requirements that are unnecessary.” The rules would require the disclosure of the dollar amounts paid by the insurer and description of any potential conflicts of interest. “A disclosure of the dollar amount paid by the insurer does not significantly enhance the substantive disclosure that is required by the rule,” Sorich said. “A consumer needs to know that compensation is being paid to the broker from another source. That alerts the consumer to a potential for a conflict of interest. The calculations of compensation paid to brokers can include insurers’ proprietary information and should not be made available to competitors. In addition, the mandate to describe any potential conflicts of interest would impose a requirement for which compliance could never be assured. A broker would never be certain whether he or she described every possible conflict of interest.”

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