State RegulationsNY specificDifficulty 1/5
When a New York broker first places coverage for a new client, what does Reg 194 (Producer Compensation Transparency) require?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Reg 194 (11 NYCRR Part 30), a broker must give the client a basic transparency disclosure: the broker receives compensation from the insurers with which business is placed, and the client is entitled to request information about that compensation. The rule keeps clients informed without banning commissions.
Why the other options are wrong
- A) Reg 194 mandates disclosure, not disarmament — brokers may lawfully continue to receive compensation from insurers.
- B) Exact dollar amounts are not automatically disclosed on every transaction; the details are provided when the client requests them.
- D) A DFS complaint is not the trigger; the basic compensation disclosure is required in the ordinary course of the placement.
Memory hook
Reg 194: say you're paid by insurers; clients may ask for details.