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Oregon: Permanently Adopts Producer Compensation Disclosure Regulations

Oregon's Department of Consumer and Business Services, Insurance Division, permanently adopted on Dec. 21, 2005, the temporary rulemaking that established minimum terms of disclosure when an insurance consumer pays compensation to an insurance producer or pays compensation to an insurance consultant who also receives other compensation. The permanent regulation became effective Sunday, Jan. 15, 2006.

NAMIC worked with members of the industry and the Insurance Division to draft a regulation that balanced the needs of the consumer for information necessary to make an informed decision about his insurance needs with the professional needs of the insurance industry.

The permanent regulation states:

1. When an insurance consultant or an affiliate of an insurance consultant receives from a prospective insured any compensation authorized under the Insurance Code or rules adopted thereunder, neither the insurance consultant nor the affiliate may accept or receive any compensation from an insurer or other third party for services provided to the prospective insured in addition to the compensation paid by the prospective insured unless the insurance consultant, prior to the transaction:
   

   (a) Has obtained the prospective insured's documented acknowledgment that the compensation will be received by the insurance consultant or affiliate; and (b) Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance consultant shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

2. When an insurance producer or an affiliate of an insurance producer receives any compensation otherwise authorized under the Insurance Code or OAR 836-071-0269 to 836-071-0277 from a prospective insured, neither the insurance producer nor the affiliate may accept or receive any compensation from an insurer or other third party for the placement of insurance in the same or related transaction unless the insurance producer, prior to the prospective insured's purchase of insurance, has:
   

   (a) Obtained the prospective insured's documented acknowledgment that the compensation will be received by the insurance producer or affiliate; and (b) Disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

• Certificate and Order
• Regulation Text

Direct questions to NAMIC State Affairs Manager Christian John Rataj.