DCBS Media Release
State seeks public comment on insurance agent compensation
(Salem) How much should an insurance purchaser be entitled to know about the compensation an agent or broker receives for selling a policy or placing business?
The Oregon Department of Consumer & Business Services (DCBS) is seeking public comments this month on that question and others relating to the compensation and duties of agents and brokers, collectively known as insurance producers.
The DCBS Insurance Division will hold a hearing 1:30 p.m. Tuesday, December 7, in Room 260 of the Labor and Industries Building, 350 Winter St. NE, in Salem. Those unable to attend the hearing may submit written comments to the division through Wednesday, December 15.
Insurance compensation practices have come under scrutiny after New York Attorney General Eliot Spitzer in October charged that brokers cheated insurance purchasers, primarily corporate clients, by rigging bids and collecting large fees from major insurers for sending business their way. Oregon is joining other state insurance regulators and law enforcement officials to investigate the alleged abuses and review compensation practices.
The December 7 hearing was originally scheduled to get feedback on the division's proposed rules focusing on disclosure requirements for compensation in certain commercial insurance transactions, as well as other issues relating to insurance producers. In light of the alleged abuses, the hearing has been expanded to gather input on compensation and conflict of interest issues for all insurance producers.
"The hearing is the best opportunity for all parties, including insurers, producers, and purchasers, to be heard on the broader public policy issues raised by the New York investigation," said DCBS Director Cory Streisinger.
"Most parties we've heard from agree that, at a minimum, more disclosure is needed," said Joel Ario, administrator of the Insurance Division. "But we remain open-minded about exactly how that should be accomplished and whether additional reforms are needed. Since most producers are reputable, we want to create rules that set the appropriate standards without imposing unnecessary regulatory burdens."
More information about the hearing and the proposed rules is available on the Insurance Division's Web site: insurance.oregon.gov. The site offers a full list of the questions the division seeks to answer. Follow the link labeled "State to investigate alleged abuses by insurance brokers and companies" and then click on "Request for testimony on additional issues…"