Willis Joins Marsh in Getting OK for Contingency Pay for MGA Services
National News • September 1, 2006
Global insurance broker Willis Group Holdings has signed an agreement with the New York Attorney General and the Insurance Department of New York amending the previous agreement banning receipt of ...
Insurance Journal is not responsible for the content of the message below.
Subject: RE: New Ways to Skin an Old Cat
Posted On: September 8, 2006, 2:32 pm CDT
Posted By: 2Faced
Comment:
Here is what the Willis leader said in April 18 2005.
Speaking in Philadelphia at the annual conference of the Risk and Insurance Management Society, Joseph Plumeri, CEO of Willis Group, said that "contingent commissions are inconsistent with client advocacy and unacceptable" for insurers to pay and agents and brokers to accept.
"We should abolish contingent commissions' throughout the industry," declared Plumeri, whose own firm has done that.
At a press conference following his speech, Plumeri urged RIMS to come out against contingencies and said it should not matter whether the agent or broker is global or local. "Why is it that it is bad for global brokers but not for the independent agent in Peekskill?" he asked, maintaining that the issue of conflict is the same, the difference is merely one of degree.
WHAT PLUMERI SAYS TODAY (09-01-2006)
"We've always received even treatment from the Attorney General's Office; we expected this determination and are pleased with this amendment to our AOD," said Joe Plumeri, Willis Group chairman and CEO.
"When working as an MGA, we represent the interests of an insurance company so this change ... is consistent with our position of being paid by our client. It also reaffirms our commitment to full transparency – such that there are no questions as to who we represent. Further, I appreciate the Attorney General's willingness to engage in this conversation to gain a thorough understand of the many nuances of the insurance broking business model."
MY THOUGHTS:
SO THEN CONTINGENCIES ARE OK, SOMETIMES ?
TRANSPARENCY BY HIDING INCOME ? TRANSPARENCY BY CREATING NEW CORPORATE STRUCTURES ? ARE YOU KIDDING ? THE ONLY WAY TO BE TRANSPARENT IS FOR EVERY LEVEL OF THE TRANSACTION TO BE, WELL, TRANSPARENT. Small agents have represented the interests of clients for 100+ years, and until people like Willis got caught steering business and bid rigging - nobody questioned the value of that chain. In fact there is so little interest in making agents reveal their commission amount that not a single consumer group has tried to get a bill sponsored. The insurance buyer cares about the PREMIUM, not the commission. So if an agent needs to reveal his commission then so should the MGA, and that includes contingencies. THEN YOU HAVE TRANSPARENCY. Frankly they should be ashamed to be so two faced, so quickly on such a major issue. It embarrassing for our business.
Subject: RE: New Ways to Skin an Old Cat
Speaking in Philadelphia at the annual conference of the Risk and Insurance Management Society, Joseph Plumeri, CEO of Willis Group, said that "contingent commissions are inconsistent with client advocacy and unacceptable" for insurers to pay and agents and brokers to accept.
"We should abolish contingent commissions' throughout the industry," declared Plumeri, whose own firm has done that.
At a press conference following his speech, Plumeri urged RIMS to come out against contingencies and said it should not matter whether the agent or broker is global or local. "Why is it that it is bad for global brokers but not for the independent agent in Peekskill?" he asked, maintaining that the issue of conflict is the same, the difference is merely one of degree.
WHAT PLUMERI SAYS TODAY (09-01-2006)
"We've always received even treatment from the Attorney General's Office; we expected this determination and are pleased with this amendment to our AOD," said Joe Plumeri, Willis Group chairman and CEO.
"When working as an MGA, we represent the interests of an insurance company so this change ... is consistent with our position of being paid by our client. It also reaffirms our commitment to full transparency – such that there are no questions as to who we represent. Further, I appreciate the Attorney General's willingness to engage in this conversation to gain a thorough understand of the many nuances of the insurance broking business model."
MY THOUGHTS:
SO THEN CONTINGENCIES ARE OK, SOMETIMES ?
TRANSPARENCY BY HIDING INCOME ? TRANSPARENCY BY CREATING NEW CORPORATE STRUCTURES ? ARE YOU KIDDING ? THE ONLY WAY TO BE TRANSPARENT IS FOR EVERY LEVEL OF THE TRANSACTION TO BE, WELL, TRANSPARENT. Small agents have represented the interests of clients for 100+ years, and until people like Willis got caught steering business and bid rigging - nobody questioned the value of that chain. In fact there is so little interest in making agents reveal their commission amount that not a single consumer group has tried to get a bill sponsored. The insurance buyer cares about the PREMIUM, not the commission. So if an agent needs to reveal his commission then so should the MGA, and that includes contingencies. THEN YOU HAVE TRANSPARENCY. Frankly they should be ashamed to be so two faced, so quickly on such a major issue. It embarrassing for our business.