Two insurance groups have filed an appeal with the New York Supreme court regarding a decision regarding the state’s new broker disclosure rule. The rule, New York Insurance Regulation 194, requires insurers to inform policyholders on how policies are paid out even if such information is not requested. Several other states have similar rules, much to the chagrin of the insurance industry that often withholds information it deems arbitrary. The two insurance groups are looking to have the rule revoked.
The Independent Insurance Agents & Brokers of New York and the Council of Insurance Broker of Greater New York filed an official appeal on September 1. Both groups say that the rule puts unnecessary strain on insurance agents and brokers who are required to divulge sensitive information to clients. This information includes differences in policies, the cost of certain insurance plans and what other clients pay for similar policies. The groups argue that agents are often left to deal with the ire of consumers that learn details about their policies that they are not happy with. Furthermore, the groups argue that the law requires insurers to spend more money on administrative costs, which drives up premiums.
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According to state law, the New York Insurance Department has time to issue a response to the appeal before the issue heads to court. The department has yet to issue such a response.