Well, the powers to be at RIMS have come out in favor of banning contingency commissions all together in the NY hearings. It would appear that the folks at RIMS just can’t fully understand the difference between contingency commissions; BID RIGGING and commissions/fees. Why can’t they understand the difference is really a mystery to me especially since most risk managers came from the insurance industry to begin with!! I wonder how many of the companies they are risk managers of, offer incentives similar or exactly how our contingency commissions work!!
It would appear that they also think their premiums are going down when the contingency commissions go away but that is not the case, commissions will have to be increase and/or fees will cover the difference. If all the agents and brokers are given the same commissions amount then it would be a level playing field but if the mega brokers are able to increase the commissions by using their premium they write as muscle, then we the little guys are now at a huge disadvantage but nobody seems to care about that on the regulatory side. The mega brokers entered into these agreements, they should have to live with them, no reason for the little guys to pay for the BID RIGGING PRACTICIES of the mega brokers. Fair is Fair, except when you are dealing with state insurance regulators.Let’s add more paperwork and cost to the clients under the guise of disclosure, an area that most clients could care less about.
As I recall, when Mr. Spitzer made his accusations, the big three Brokerage firms were falling all over themselves to pony up money and settle these cases out of court, agreeing to shoot themselves in the foot, while most of the industry questioned whether contingent commissions were illegal. Now, they look at their hole card and notice they do not get that revenue and point the finger at others, crying they got the shaft. Hmm…maybe they should have considered things before agreeing to something they would want undone in the future. They want to ensure the playing field is level (which means slanted in their direction).
Contingent commissions may or may not be bad public policy. That is what should be decided on by the regulators. But for those that agreed with tons of attorneys advising–they should have to live with their decisions.
Joe makes a great point regarding how the big guys handled the issue. ALso remember that they were steering business for their best interests and not the interests of the clients, and in some cases were committing fraud to a client by getting fake quotes or blocking markets, again not in the best interests of their customers. Don’t punish all for the errors of a few!
How is it that those firms that voluntarily signed agreements to settle investigations of their practices now say that the sanctions they agreed to should apply to all of those not investigated?
The signers of the agreements are saying that they are at a competitive disadvantage because of the terms of the sanctions they agreed to. Far from being unfair, this is perfectly fair. To impose those sanctions against all participants in the industry — those never suspected of any wrongdoing — would be a perversion of justice.
I cannot get over the unmitigated gall of some who suggest that those who were not guilty of wrongdoing should be punished alongside those suspected of being guilty, as a way of mitigating their own punishment, to which they agreed.
Doing this would indeed tilt the playing field in the direction of those that signed the agreements by forcing their punishments on their competitors.
What ever happened to, “If you can’t do the time, don’t do the crime?”
Bottom line, though, is that all of us consumers have benefited from the lower premiums that were passed on by the companies who had to pay less in contingent commissions, right?
It is not Dan Glaser’s alleged “unlevel playing field” that has hurt Marsh, it is their unethical, illegal and criminal activities that have hurt Marsh (and Aon and Willis). Were it not for their illegal actions, this entire matter regarding broker compensation would never have arisen. It is the height of sophistry to now blame other agents and brokers for Marsh’s difficulties.
If every small agent now has to hire a full time compliance officer, the playing field will be further tilted in favor of the very, very large brokers. That kind of edict would surely result in an “unlevel playing field” and would be eminently unfair to 99.9% of all agents.
You mean to say that the soft market is being caused by insurance companies not paying contingent commissions to Marsh, Aon and Willis? I was led to believe that it was caused by a lack of hurricanes and other non-federally funded disasters, and by a heighted competition for premium dollars to invest, and by better underwriting results. Perhaps it was Marsh, Aon and Willis who have been spreading this propoganda!
AON tried to get the Illinois legislature to pass a bill in Illinois that would impose their sanctions on every agent in Illinois & even suceeded in getiing a legislator to sponosor just such a bill. Fourtunately the legislators told AON to take a hike and did not pass the bill. As their sanctions were for something they did wrong. Following AON’s logic then someone who got a DUI & was required to blow in a tube to start a car then everyone should have to. So hopefully lawmakers around the country take Illinois’s lead & tell the bullys to take a hike & they still play in the sandbox where the good boys are allowed to play.
As far as disclosure of fee’s if we are going to do it we should do it as whole in our society not just the insurance industry. For instance I want to know WAL-Mart’s markup on every product.
Dan Glaser,etal, want to see the fees eliminated to eliminate smaller competitiors that probably can’t get by without them. Marsh is doing no better since he and all the other top cats came along and just like their predecessors, they are blaming Spitzer. Marsh is so far removed from their founding philosophy of service now. They resemble an upside down pyramid, no foundation. Marsh need only look at their recent boondoggles: 50 million wasted on “rebranding”, creation of a 150 staff + policy review group (just eliminated), millions spent on their licensing and surplus lines compliance and are worse off than ever in those areas – this isn’t necessarily the fault of the working staff, they report to management that is clueless on the subjects. It’s simple Marsh: sell the insurance, service the insurance and keep the insurance (their client retention is woeful but many brokers have the same issue). Being publicly traded companies does not lend itself to what should be their underlying priority, service for the client. Mr. Marsh and Mr. McClennan traveled the country in trains, how many clients has Glaser, etal really seen? He only knows, cut, cut, cut and the cut should come from him and the other top cats when goals aren’t satisfied. Sure, that will happen.
March, AON, and Willis all admitted to wrong doing. The rest of the brokers did not, so why should have have to give up an important part of their overall budge just to make them happy. I know of one broker that actually sends out a disclosure letter with every new and renewal policy. As long as the public knows about it there isn’t a problem.
Brokers and agents have been getting contingent commissions for years, after all we are NOT a non-profit organization. It’s like any company that gets a bonus from it’s supplies or buyers. Same darn thing. They just turned it into a way to make more money and strong are the companies.
It’s time to put this whole mess to bed and be done with it. Doesn’t look good for the insurance industry as a whole. Get over it already!!
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Well, the powers to be at RIMS have come out in favor of banning contingency commissions all together in the NY hearings. It would appear that the folks at RIMS just can’t fully understand the difference between contingency commissions; BID RIGGING and commissions/fees. Why can’t they understand the difference is really a mystery to me especially since most risk managers came from the insurance industry to begin with!! I wonder how many of the companies they are risk managers of, offer incentives similar or exactly how our contingency commissions work!!
It would appear that they also think their premiums are going down when the contingency commissions go away but that is not the case, commissions will have to be increase and/or fees will cover the difference. If all the agents and brokers are given the same commissions amount then it would be a level playing field but if the mega brokers are able to increase the commissions by using their premium they write as muscle, then we the little guys are now at a huge disadvantage but nobody seems to care about that on the regulatory side. The mega brokers entered into these agreements, they should have to live with them, no reason for the little guys to pay for the BID RIGGING PRACTICIES of the mega brokers. Fair is Fair, except when you are dealing with state insurance regulators.Let’s add more paperwork and cost to the clients under the guise of disclosure, an area that most clients could care less about.
As I recall, when Mr. Spitzer made his accusations, the big three Brokerage firms were falling all over themselves to pony up money and settle these cases out of court, agreeing to shoot themselves in the foot, while most of the industry questioned whether contingent commissions were illegal. Now, they look at their hole card and notice they do not get that revenue and point the finger at others, crying they got the shaft. Hmm…maybe they should have considered things before agreeing to something they would want undone in the future. They want to ensure the playing field is level (which means slanted in their direction).
Contingent commissions may or may not be bad public policy. That is what should be decided on by the regulators. But for those that agreed with tons of attorneys advising–they should have to live with their decisions.
Joe makes a great point regarding how the big guys handled the issue. ALso remember that they were steering business for their best interests and not the interests of the clients, and in some cases were committing fraud to a client by getting fake quotes or blocking markets, again not in the best interests of their customers. Don’t punish all for the errors of a few!
How is it that those firms that voluntarily signed agreements to settle investigations of their practices now say that the sanctions they agreed to should apply to all of those not investigated?
The signers of the agreements are saying that they are at a competitive disadvantage because of the terms of the sanctions they agreed to. Far from being unfair, this is perfectly fair. To impose those sanctions against all participants in the industry — those never suspected of any wrongdoing — would be a perversion of justice.
I cannot get over the unmitigated gall of some who suggest that those who were not guilty of wrongdoing should be punished alongside those suspected of being guilty, as a way of mitigating their own punishment, to which they agreed.
Doing this would indeed tilt the playing field in the direction of those that signed the agreements by forcing their punishments on their competitors.
What ever happened to, “If you can’t do the time, don’t do the crime?”
Bottom line, though, is that all of us consumers have benefited from the lower premiums that were passed on by the companies who had to pay less in contingent commissions, right?
Ha ha
It is not Dan Glaser’s alleged “unlevel playing field” that has hurt Marsh, it is their unethical, illegal and criminal activities that have hurt Marsh (and Aon and Willis). Were it not for their illegal actions, this entire matter regarding broker compensation would never have arisen. It is the height of sophistry to now blame other agents and brokers for Marsh’s difficulties.
If every small agent now has to hire a full time compliance officer, the playing field will be further tilted in favor of the very, very large brokers. That kind of edict would surely result in an “unlevel playing field” and would be eminently unfair to 99.9% of all agents.
You mean to say that the soft market is being caused by insurance companies not paying contingent commissions to Marsh, Aon and Willis? I was led to believe that it was caused by a lack of hurricanes and other non-federally funded disasters, and by a heighted competition for premium dollars to invest, and by better underwriting results. Perhaps it was Marsh, Aon and Willis who have been spreading this propoganda!
AON tried to get the Illinois legislature to pass a bill in Illinois that would impose their sanctions on every agent in Illinois & even suceeded in getiing a legislator to sponosor just such a bill. Fourtunately the legislators told AON to take a hike and did not pass the bill. As their sanctions were for something they did wrong. Following AON’s logic then someone who got a DUI & was required to blow in a tube to start a car then everyone should have to. So hopefully lawmakers around the country take Illinois’s lead & tell the bullys to take a hike & they still play in the sandbox where the good boys are allowed to play.
As far as disclosure of fee’s if we are going to do it we should do it as whole in our society not just the insurance industry. For instance I want to know WAL-Mart’s markup on every product.
Dan Glaser,etal, want to see the fees eliminated to eliminate smaller competitiors that probably can’t get by without them. Marsh is doing no better since he and all the other top cats came along and just like their predecessors, they are blaming Spitzer. Marsh is so far removed from their founding philosophy of service now. They resemble an upside down pyramid, no foundation. Marsh need only look at their recent boondoggles: 50 million wasted on “rebranding”, creation of a 150 staff + policy review group (just eliminated), millions spent on their licensing and surplus lines compliance and are worse off than ever in those areas – this isn’t necessarily the fault of the working staff, they report to management that is clueless on the subjects. It’s simple Marsh: sell the insurance, service the insurance and keep the insurance (their client retention is woeful but many brokers have the same issue). Being publicly traded companies does not lend itself to what should be their underlying priority, service for the client. Mr. Marsh and Mr. McClennan traveled the country in trains, how many clients has Glaser, etal really seen? He only knows, cut, cut, cut and the cut should come from him and the other top cats when goals aren’t satisfied. Sure, that will happen.
March, AON, and Willis all admitted to wrong doing. The rest of the brokers did not, so why should have have to give up an important part of their overall budge just to make them happy. I know of one broker that actually sends out a disclosure letter with every new and renewal policy. As long as the public knows about it there isn’t a problem.
Brokers and agents have been getting contingent commissions for years, after all we are NOT a non-profit organization. It’s like any company that gets a bonus from it’s supplies or buyers. Same darn thing. They just turned it into a way to make more money and strong are the companies.
It’s time to put this whole mess to bed and be done with it. Doesn’t look good for the insurance industry as a whole. Get over it already!!