Liberty Mutual Opts to Fight, Not Settle, Charges Over Contingent Commissions, Account Steering

May 7, 2006

  • May 8, 2006 at 1:44 am
    edistocreek says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    As an insurance professional, and a policyholder of Liberty Mutual, I must say that it is about time someone stood up to Spitzer (besides Mr Greenberg) rather than increasing my premiums by paying outrageous fines and fees–hush money– to make the problems go away.

    If they are guilty, then prove it in court so we can all see. If they are not guilty, why make them pay just to make the loose Spitzer cannon go away?
    Go for it, Liberty.

  • May 8, 2006 at 1:53 am
    legally challenged says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I don\’t understand the attempt of the officials to compel Liberty Mutual to change practices occurring outside of NY and CT. The regulators seem to be out of line in my eyes as well.

  • May 8, 2006 at 2:10 am
    Non-captive agent says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Like most major insurers, Liberty Mutual has had its share of market conduct violations in many states. Unlike most insurers, Liberty management often blames lower level employees, thereby evading responsibility for its actions.

    What are the careers and lives of a few employees (loyal, responding rationally to the pressures put on them and incentives offered to them by Liberty\’s management)compared to saving a few $10s of million bucks?

    Is it that Liberty, a leading commoditizer of insurance, views its employees (and other stakeholders) in the same way?

    Good luck, lower level guys who are in the way! You\’re only a pawn in their game. Get an attorney.

  • May 8, 2006 at 2:52 am
    Southern Agent says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Finally !

  • May 8, 2006 at 3:27 am
    Prakash V. Naor says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    \”What are the careers and lives of a few employees (loyal, responding rationally to the pressures put on them and incentives offered to them by Liberty\’s management)compared to saving a few $10s of million bucks?\”

    How strange. First you describe bid rigging as \”loyal\” and \”rational\”, as if it makes sense to risk your company\’s well-being for a few thousand bonus bucks in your own bank account. Then you excoriate Liberty Mutual by accusing them of similar behavior – looking out for themselves for a few $100M (not \”$10M\”, if you looked at any of the settlements). At least get your moral systems consistent.

    In the meantime, good for Liberty.

  • May 8, 2006 at 3:36 am
    ric says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I agree with Non-Captive Agent – underlings get a lawyer. In almost 40-yrs of large account producing and handling I can attest that if LM isn\’t guilty on these counts I can point to countless cases where their quotes were purposely confusing because of dividend discussions and what they billed an insured over 12 months was frequently higher than what the insured \”thought\” they quoted – bottom line it wasn\’t money they were entitled to. What are we to believe made them righteous all of a sudden?

  • May 8, 2006 at 4:14 am
    non-captive agent says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Prakash–I agree with your point. I cannot as an individual reconcile these frames of reference. When the frames of reference are out of alignment, there is chaos. When there is chaos, there is opportunity for theft on a massive scale. It is the responsibility of insurance company managements to align the frames of reference and not dump on employees by failing to do this, pressuring them regarding their future and very career, blaming them and profiting thereby while making out like bandits.

    Yes, the time is out of joint…and no individual Hamlet in such an insurance company today is going to fare much better than the original Hamlet. Look at your own comments–you are clearly pre-judging the employees. It is time also to look to the top. Hold them accountable. Do it in court. Subpoena documents. See if there is evidence of destruction of evidence. See if the illegal acts were directed from the top with a careful avoidance of a paper trail–e.g. phone calls, personal meetings. The first rule of every executive these days is \”Put nothing in writing.\” The higher up they are the less you will ever see in writing from them. They and their lawyers learned this some years ago, although some are still poorly advised or careless. And don\’t stop with the publicly held brokers–many of the privately held large brokers also deal with Liberty. Liberty\’s intransigence could be the opening wedge to deal with this so far unaddressed problem area. Commodotize all stake-holders…

    The stakes may end up being higher than Liberty has imagined. I look forward to following this trial in Insurance Journal and other sources. I hope it is a long, messy and revealing trial, whatever the outcome. Some truth will out in the end.

  • May 8, 2006 at 5:13 am
    Small Agent says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    How interesting is it that Eliot Spitzner is running for Governor of New York and has in the past been a headline hunter? How is he fixing the industry? He isn\’t! But he is staying in the headlines. There is a saying in CT that the most dangerous place to be is between Richard Blumenthal and a camera or microphone. This is politics at it\’s best (or worst). It\’s about time that someone stood up to them. That\’s what the courts are for.

  • May 10, 2006 at 9:39 am
    LS says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Good for Liberty, Spitzer has gone too far. Contingent commissions recognize agents big and small for well developed, managed, profitable books of business. These agents receive legitimate compensation for such management. It only goes to the agents that have agreed to do front line underwriting and loss control and who produce profitable business. It is along used practice within the industry, known and recognized and respected by regulators. Since when is “lowest price” the plumb-line for fiduciary duty? As for bid rigging go get the companies, but stay away from legitimate industry practices that help the buying public, the agents and the companies, these are win-wins for all involved. What good comes out of a political move that puts spitzer in the news and ultimately causes the loss of jobs for hundreds of well meaning day to day workers that have lost their livelihood due to unrealistic penalties and fines caused by one or two executives? Put those involved in riggedâ€â€Ŕbids in jail (through the proper courts) and do not needlessly ruin the lives of every day office workers. I wouldn’t vote for spitzer Because of what he is doing.



Add a Comment

Your email address will not be published. Required fields are marked *

*