As IIABNY leads the battle against Producer Compensation Disclosure, many other organizations are supporting the new regulation. RIMS, The Risk and Insurance Management Society, has hailed the recent declaration by Marsh & McLennan that they will not accept contingent commissions. (They are, however, accepting contingent commissions on personal lines.) Of course this was after Marsh, AON, and Willis Group reached an agreement with NY, IL and CT allowing them to collect contingent commissions again if they abide by NY’s new disclosure regulation. Willis even has a website, www.clientsbeforecontingents.com, to separate themselves from the firestorm that they were part of creating. As usual, it’s the small agents and brokers that are left holding the bag. I hope the bag doesn’t get any smaller.

It looked like NY was on the right track back in 2001 when they revised No-Fault Regulation 68 to shorten the time periods that insureds and medical suppliers have to present no-fault claims to the carriers. It only took a few years for the abusers of the system to catch up. Since 2004, the average cost of a no-fault claim in NY has increased by 58%. Superintendent Jim Wrynn understands that NY’s no-fault system is beset by fraud, and is working with legislators to come up with solutions. Besides driving up auto rates in the state, the scale of fraud and abuse of the no-fault system is also clogging NY’s court system. Since NY has the highest no-fault dollar threshold in the country, we are a desirable place for the unethical medical providers and unscrupulous lawyers to operate. Legislation needs to be strengthened to keep NY auto rates from rising.

Remember when agents were arguing that credit score had nothing to do with automobile insurance? Well, it continues to be a recurring topic as there have been a number of states that have taken action against the use of credit scoring to determine insurance rates. If it truly is a tool to help indicate the propensity for claims, hopefully the companies will be able to defend their research when attacked by the consumer groups. FYI – Maryland banned the use of credit in homeowners rating in 2002.