Boy, these Attorney General’s are pure extortionists who continue to steal money from insurers and brokers even though now they have ADMITTED that there is nothing illegal about contingent commissions. Hey AG’s, insurance brokering is not about sealed bids. These Attorney General’s in each of these states knows absolutely nothing about insurance. What a continuation of a crock started by Eliot Spitzer. Professionals, don’t believe the hype behind these headline seeking political hacks. These AG’s are nothing but garbage.
When will insurance industry realize that serving two masters is a conflict that only will create more issues down the road. Try explaining to the guy on the street that an intermediary is compensated by both parties and this is a good business practice. Some say that is common sense. Disclosure or not it is a bredding ground for abuse. I understand that in the securities business such practices are not legal.
One wonders if it is only a matter of time before non-U.S. jurisdiction AGs get involved (I am not talking specifically about AIG here, it could, ‘hypothetically’ be any insurer/broker). If risks subjected to those ‘B quotes’ were also located in England, etc. (but brokered and/or underwritten in the U.S.), then clients in other countries may ‘explore’ the possibility of taking action to protect their interests. I WONDER WHAT THE FSA in the UK IS DOING HERE, IF ANYTHING….Why should the U.S. take action and nobody else? Can somebody please explain? Doesn’t anyone realize that global brokers may refer a risk located in one country to be underwritten in another (and steer the business accordingly)? I
Please explain why you don’t think there is something wrong with this:
“…, AIG and several of its insurance subsidiaries allegedly conspired with Marsh and other brokers by submitting fake bids to create the illusion of a competitive bidding process in the excess casualty commercial insurance market.”
I believe in brokerage commissions, but this does appear unfair and unscrupulous.
I’m not totally naive. I do not believe the attorney general is going after the money because he cares about the consumer, but I do question this practice.
All, ‘if any’, excess casualty underwriters (from all major insurers concerned) who lost their job ‘without cause’ should be subpoenaed and interviewed by the respective local jurisdiction. Is it possible that some underwriters lost their job before the Spitzer investigation because they raised various issues, related or seriously non-related? People cannot talk when there is a gag order on their respective settlement, lest they be sued. Perhaps a subpoena can override this circumstance. It would be instructive to see if there are any insurers with a track record of making people disappear…but of course, who knows, right!
I do not know why FSA is not pursuing bid rigging issue – to my knowledge all instances to date appear to involve only US companies and US persons. I have no clue if bid rigging spread cross border. Your question is a good one. EU anti competition folks recently issued a report on various issues covering corporate insurance practices and did not look favourably on contingent commission practice where intermediary is paid by both counter parties..
In this case I respectfully must say that the AGa are pursuing criminal cases and not money. Bid rigging practice hurt the reputation of the entire industry and the monetary fines are minor in comparison.
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Boy, these Attorney General’s are pure extortionists who continue to steal money from insurers and brokers even though now they have ADMITTED that there is nothing illegal about contingent commissions. Hey AG’s, insurance brokering is not about sealed bids. These Attorney General’s in each of these states knows absolutely nothing about insurance. What a continuation of a crock started by Eliot Spitzer. Professionals, don’t believe the hype behind these headline seeking political hacks. These AG’s are nothing but garbage.
When will insurance industry realize that serving two masters is a conflict that only will create more issues down the road. Try explaining to the guy on the street that an intermediary is compensated by both parties and this is a good business practice. Some say that is common sense. Disclosure or not it is a bredding ground for abuse. I understand that in the securities business such practices are not legal.
One wonders if it is only a matter of time before non-U.S. jurisdiction AGs get involved (I am not talking specifically about AIG here, it could, ‘hypothetically’ be any insurer/broker). If risks subjected to those ‘B quotes’ were also located in England, etc. (but brokered and/or underwritten in the U.S.), then clients in other countries may ‘explore’ the possibility of taking action to protect their interests. I WONDER WHAT THE FSA in the UK IS DOING HERE, IF ANYTHING….Why should the U.S. take action and nobody else? Can somebody please explain? Doesn’t anyone realize that global brokers may refer a risk located in one country to be underwritten in another (and steer the business accordingly)? I
Please explain why you don’t think there is something wrong with this:
“…, AIG and several of its insurance subsidiaries allegedly conspired with Marsh and other brokers by submitting fake bids to create the illusion of a competitive bidding process in the excess casualty commercial insurance market.”
I believe in brokerage commissions, but this does appear unfair and unscrupulous.
I’m not totally naive. I do not believe the attorney general is going after the money because he cares about the consumer, but I do question this practice.
Anyone out there who can honestly fill me in?
All, ‘if any’, excess casualty underwriters (from all major insurers concerned) who lost their job ‘without cause’ should be subpoenaed and interviewed by the respective local jurisdiction. Is it possible that some underwriters lost their job before the Spitzer investigation because they raised various issues, related or seriously non-related? People cannot talk when there is a gag order on their respective settlement, lest they be sued. Perhaps a subpoena can override this circumstance. It would be instructive to see if there are any insurers with a track record of making people disappear…but of course, who knows, right!
I do not know why FSA is not pursuing bid rigging issue – to my knowledge all instances to date appear to involve only US companies and US persons. I have no clue if bid rigging spread cross border. Your question is a good one. EU anti competition folks recently issued a report on various issues covering corporate insurance practices and did not look favourably on contingent commission practice where intermediary is paid by both counter parties..
In this case I respectfully must say that the AGa are pursuing criminal cases and not money. Bid rigging practice hurt the reputation of the entire industry and the monetary fines are minor in comparison.