If there is a question whether New York’s new Regulation 194, the new insurance producer compensation disclosure regulation which became effective on January 1 of this year, applies to excess and surplus lines wholesale brokers, the Excess Line Association of New York (ELANY) and the Insurance Department have the answer (see here and here).
From the Department:
Section 30.5(d) of Regulation 194 states that the regulation does not apply to an insurance producer that has no direct sales or solicitation contact with the purchaser, which may include a wholesale broker or a managing general agent. Therefore, such a producer has no obligation to maintain records pertaining to producer compensation, unless the insurer has specifically contracted with the producer to maintain the records pursuant to Regulation 152. Of course, it is always prudent for a producer to maintain such records.
Reg 194 applies to surplus lines placements, but not wholesale placements. So if a producer has direct contact with the insured, Reg 194 applies to that producer regardless of whether the transaction is admitted or non-admitted (surplus lines).
Specialty Insurance Expertise: Tennant Risk Services
Supporting Insurance Entrepreneurship: Tennant Capital Partners