Sep 14
New Enhancement to NYSIF Audit Upload Program

​The New York State Insurance Fund is pleased to announce a new enhancement to the Audit Upload Program.  Workers' Compensation policyholders or their representatives can conveniently and securely upload financial records from their online accounts in lieu of an on-premise audit or to resolve an audit issue.  The NYSIF is working to make it easier for brokers to do business with them. 

submitted by
Kathy Lawler, AAI, CIC
AVP Communities & Relationships

Sep 10
Big I NY Convenes Industry Strategy Meeting on Cyber Regulation

​What it Means:

imageToday, Big I NY led a strategy meeting with representatives from the state's producer groups and insurance trades to discuss a unified industry response to the Department of Financial Services' recent decision regarding “third party service providers" under the new cyber regulation. We and our allies are deeply concerned with the recent determination, as it will be extremely burdensome and confusing for producers and insurers to fully comply with.

What's Next:

The group unanimously agreed to request a joint meeting with the DFS to share our concerns, with the ultimate goal that that the decision be modified or reversed. The industry will also work collaboratively to develop standard guidelines for covered entities to use when conducting due diligence in working with all third party service providers.

Big I New York Has Your Back:

Beginning prior to the issuance of first draft of the cyber regulation, we have worked with the DFS to share our concerns and seek modifications to the regulation to minimize the burden to agents while still ensuring consumer data is protected from cyber threats. We recognize that the cybersecurity regulation is a top issue for our members, and we are continuing to work to ensure that our concerns are addressed. Furthermore, we continue to work to develop resources to help our members comply with the regulation.

Contact Scott Hobson​ if you have any questions.

Scott Hobson, MPA

Director of Government Relations

Sep 07
Big I Meets With DMV and Carriers to Discuss IIES Reporting

imageWhat it Means:

Today, the Big I government relations team, joined by Albany-area member Don Chrysler, met with the Department of Motor Vehicles to discuss the issue of improving compliance with the requirement that carriers notify the DMV of auto insurance transactions within 7 days.

One concern raised during the meeting was that agents may cause carriers to be out of compliance if they delay transmitting transaction data to carriers. While we acknowledge that this may be occurring, we do not believe that it is widespread. Nearly all agents use either insurance carriers' own portals or agency management systems which integrate with insurer systems, or a combination of the two. In both cases, transaction information is instantaneously transmitted to the insurer. This meeting was a timely opportunity to share the agents' perspective on the issue.

What's Next:

The DMV acknowledged that many factors may contribute to late notice of transactions, including delays caused by insurers, agents, auto dealers, or motorists, delays resulting from the complexity of commercial fleet policies, typographical and data entry errors, and technical limitations of the DMV system. The agency indicated that it would be necessary to identify the relative magnitude of each factor in order to help insurers identify which causes to focus on, but that they do not have the capacity to do so. Instead, they will provide insurers with “snapshots" of transaction data for insurers to analyze. It is anticipated that DMV will have a better understanding of the main causes of noncompliance, based on analysis by insurers, by January 2019. This analysis will be a continual, ongoing process.

Big I New York Has Your Back:

We are committed to working with the DMV and carriers to ensure compliance with the IIES notification requirement. To that end, be on the lookout for educational materials and/or programming focused on best practices for reporting. Furthermore, we will continue to ensure agents' interests are represented as DMV steps up enforcement. We anticipate that carriers will begin reaching out to their agents (many have already) with guidance on how to comply. It is possible that carriers could also consider withholding commission or other punitive measures for agents who delay transmitting transaction information.

For more information, contact Tim Dodge​ or Scott Hobson.

Scott Hobson, MPA

Director of Government Relations​


Aug 23
New Life Insurance "Best Interest" Standard Raises Concerns for Agents

swh headshot blog.jpgThe news:

Recently, the NYS Department of Financial Services adopted its final version of Regulation 187, which alters the standard of care for producers in sales of life insurance and annuities. The regulation replaces the previous “suitability" standard with a “best interest" standard, and will take effect March 1, 2019.

Under the suitability standard, a producer must reasonably believe the policy they sell a customer is suitable based on the facts provided by the customer. The best interest standard adds the further requirement that producers divine which policy they believe is in the customer's best interest, including considering all potential consequences of the transaction, favorable and unfavorable. Furthermore, producers will be required to document and disclose to the customer, in writing, every factor they considered in selecting a policy.

Why it matters:

Requiring producers to act in the best interest of consumers seems simple and reasonable, but in reality the standard is vague, subjective, and likely to create significant unintended consequences.

One major concern with the best interest standard is that it will significantly increase errors and omissions (E&O) lawsuits against producers. The expansive list of criteria producers must consider creates ample opportunities for a customer to second-guess and retrospectively scrutinize a policy they selected, even if a producer was acting in good faith.

Furthermore, we are concerned that the new standard, while well intentioned, fundamentally alters the agent-customer relationship in a troubling way. Specifically, the regulation creates a duty for agents to recommend products to customers. However, longstanding case law has held that agents do not make recommendations, but instead inform and take orders. Changing this relationship will limit producers' ability to defend themselves from weak or spurious lawsuits.

Lastly, it is unclear how this regulation would affect the actions, steps, or tasks a producer performs that are not already performed today. I seems unlikely that the best interest standard will significantly improve customer satisfaction.

This new regulation will create uncertainty, raise the risk that a producer will be sued, and consequently raise the cost of E&O insurance. In the face of this, small family owned and community agencies may make the decision to cease the sale of life insurance products.

Our stance:

Big I New York worked with the DFS during the entire process, and was successful at securing several amendments to alleviate the concerns of producers. While we appreciate many of the changes the department made, the best interest standard, as it currently stands, remains troubling. Big I New York will continue to explore every possible recourse to this latest regulation.

While bad actors in the life insurance and annuities industries are in the distinct minority, we recognize and agree with the need to protect consumers from abuse. However the new best interest standard swings the pendulum too far, offering negligible if any benefit to consumers while putting yet another burden on the backs of small agencies struggling to succeed in a challenging market. To the extent that this new regulation causes producers to abandon the life insurance space, consumers will lose a trusted ally and advocate in navigating the complex world of insurance. 

Aug 17
DMV Stepping Up Enforcement of Notification Requirements – What You Need to Know

​​​​​swh headshot blog.jpgThe NYS DMV requires notification of vehicle liability insurance coverage transactions for vehicles registered in New York State for which an insurance ID card or insurance certificate has been issued by, or on behalf of, an insurance company. An insurer must notify the DMV within 7 days of the effective date of the transaction. ​

The DMV is beginning to step up enforcement of this requirement, and it is important that agents and brokers do their part to help insurers comply.

If you manually notify carriers of transactions (i.e. you are not using the insurer's portal, or are using an agency management system that does not integrate with insurers' systems), please be sure to transmit transaction information to the insurer promptly. Your contracts with insurers may specify a time frame. The best practice is to notify immediately once an auto ID card is issued.

If you have any questions, please contact Tim Dodge or Scott Hobson​

Scott Hobson, MPA

Director of Government Relations

Aug 16
AmTrust Clarifies Background Check Requests

Am trust logo.png

We have had several questions from members regarding a recent inquiry from AmTrust North America's licensing department requesting Individual Background information from producers that are currently appointed by AmTrust.  We reached out to our contact at AmTrust and they explained that as an insurance company they are required by federal and state laws to ensure the individuals they engage in the business of insurance with are free of any felony convictions or any offence falling under the Violent Crime Control and Law Enforcement Act of 1994 (18 U.S.C 1033 & 1034).  The reason that this request is currently being made is that due to AmTrust's acquisitions and a new computer system, in some cases they did not have complete information on file.  In order to make it convenient to comply, AmTrust will send their producers a secure link to Career Builder Employment Screening (CBES) to complete the process which will take less than 10 minutes.  We want to give you this information in the event that you receive this request from AmTrust North America's licensing department. 

Kathy Lawler, AAI, CIC
AVP  Communities & Relationships

Aug 10
DFS Issues Troubling Decision on Cyber Regulation
imageIn response to questions posed by Big I and other producer groups, the Department of Financial Services has issued further clarification on what entities it considers “third party service providers" for the purposes of the cyber regulation.

Agents are to be considered “third party service providers" of the insurance companies whose policies they sell. Furthermore, insurance companies may (emphasis added) be considered “third party service providers" for the agents who sell their policies. The cybersecurity regulation requires, as of March 1st, 2019, that all covered entities:

“…implement written policies and procedures designed to ensure the security of Information Systems and Nonpublic Information that are accessible to, or held by, Third Party Service Providers."

This latest response raises as many questions as it answers, and raises concerns that the DFS may not fully appreciate the real world impact of this decision on agents and brokers.

Under this new interpretation, insurance c​ompanies will be required to create cybersecurity guidelines for every agent they do business with, as well as ensure that those guidelines are being followed. Per earlier guidance from the DFS, simply the fact that agents have certified their compliance with the cybersecurity regulation is not sufficient to satisfy this requirement. The department has, in effect, placed a higher burden on insurance companies for policing cybersecurity than the department itself.

The DFS states:

“...when the independent agent holds or has access to any Nonpublic Information or Information Systems maintained by an insurance company with which it works (for example, for quotations, issuing a policy or any other data or system access), the independent agent will be a Third Party Service Provider with respect to that insurance company; and the insurance company, as a Covered Entity, will be required under 23 NYCRR 500.11 to have written policies and procedures to ensure the security of its Information Systems and Nonpublic Information that are accessible to, or held by, the independent agent (including but not limited to risk based policies and procedures for minimum cybersecurity practices, due diligence processes, periodic assessment, access controls, and encryption).

Further, an independent agent will also be an Authorized User if it participates in the business operations, and is authorized to use any Information Systems and data, of an insurance company that is a Covered Entity. In such a case, the insurance company must implement risk-based policies, procedures and controls to monitor the activities of the independent agent, as more fully described in 23 NYCRR 500.14."

Even more troubling is that the new interpretation indicates, that in some cases, the same requirements may apply to agents and brokers vis-à-vis the insurance companies whose policies they sell. From a practical standpoint, this would be extremely burdensome and challenging to comply with. It seems impractical and illogical that this responsibility should fall on agents and brokers.

“It is also noted that, like any other Covered Entity, an insurance company may also be a Third Party Service Provider and/or Authorized User with respect to another Covered Entity, including an independent insurance agent."

We are deeply concerned by the DFS's latest guidance, and will continue to work with the department to gain further clarification on what will be required of producers. We are exploring every possible recourse to reduce the negative impact to our members.

For questions, please contact Tim Dodge or Scott Hobson

Scott Hobson, MPA
Director of Government Relations
Aug 10
Are you ready for the next cybersecurity deadline?

swh headshot blog.jpgAnother deadline for New York's cybersecurity regulation is fast approaching! As of September 3rd, you must have a data retention policy in place for your agency. This applies to you even if you qualify for the limited exemption.

In plain English, this means you must lay out your procedures for how you long you will retain nonpublic information (for example, clients’ personal information), and how you will dispose of such information when it is no longer needed. Nothing needs to be filed with the DFS at this point, you simply need to write your policy and ensure it is being followed.

If you’re a Big I NY member, good news – we've created a guide​ to help you create your data retention policy, as well as information on the DFS’s guidance on record retention. Log in to your Big I NY account to access the guide.

Contact Scott Hobson or Tim Dodge if you have any questions.

Scott Hobson, MPA
Director of Government Relations​​​

Aug 08
New IRS Draft Reg a Positive Step Toward Allowing All Agents and Brokers to Benefit From Pass Through Tax Deduction

​Today, thanks in no small part to your efforts, the IRS issued a draft regulation with a potentially significant positive impact for agents and brokers.

The agency issued the first of three potential regulations relating to a provision in the new tax code which gives owners and shareholders of “pass through" entities a 20% tax deduction. However, an owner or shareholder of a “specified service trade or business" with annual taxable income between $315,000 - $415,000 (joint) and $157,500 - $207,500 (single) will slowly see the deduction phased out and those above $415,000 (joint) and $207,500 (single) will be prohibited from utilizing the new deduction.  

30742896_10155568451906909_52712915307855872_n.jpgThe big question for insurance agents and brokers has been whether we would be considered a “specified service trade or business.”  We are happy to report that INITIAL review of these draft regulations indicates that the IRS DOES NOT consider insurance agents and brokers to be a “specified service trade or business.”

In April, nearly two dozen Big I NY members joined other agents and brokers from across the country at our national conference in Washington, D.C. There, members met with members of Congress and urged them to ensure independent brokers and agents were treated fairly under the new tax law.

We would like to give a special thanks to the Western New York, Tri-County, Suffolk, and Central New York local associations, who each sent a delegation to D.C. This latest step forward is a testament to our power and influence as an organization, and our ability to use our voices to bring about positive change.

​Scott Hobson, MPA

Director of Government Relations

Aug 03
DMV to Step Up Enforcement of Reporting Requirements

​It has recently come to our attention that the Department of Motor Vehicles (DMV) notified insurance companies earlier this year that they will start enforcing an existing regulation that requires companies to report new business to the DMV within seven days.  As a result, some insurance companies have been notifying their agents of the need to report sooner to the company. 

We are gathering additional information on this issue and will be meeting with the DMV to discuss the agents' role in the transmittal process.  If you have received a notification from any of your insurance companies and are willing to share please send to Big I New York's Director of Government Relations Scott Hobson at .

Kathy Weinheimer, CPCU, AAI
Senior VP Industry Relations

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