Posted On: May 30, 2007, 4:01 pm CDT

Posted By: Tom Myers

The part that troubles me is "Failure to disclose such arrangements runs counter to the spirit of partnership that risk managers seek to achieve with their brokers, vendors, and insurers."

Partnerships? OMG, you may have to get outside of your comfort zone and contact another broker? Heaven forbid. Bottom line...if you don't trust your current vendor to get you the most competitive price for the most comprehensive coverage, then it's time to switch vendors.

I am a small, main-street independent agent and I disagree with the notion that contingencies cause a conflict of interest. The contingencies make sure I don't start placing marginal business (read: overly susceptible to loss) in preferred companies. I don't have the ability, due to competition, to "bid rig" or steer business. Many of my competitors have the same companies as I and the companies give everyone the same quote.
I do not deal with risk managers because the companies I insure are smaller.

While I agree that the bid-rigging/steering scandal that happened is unethical and greedy, I lay much of the blame on the highly paid, highly educated risk managers that allowed them to get away with it simply because they were too lazy/busy to contact another broker/company for alternative quotes. This is what your being paid for RIMS members...if you don't understand the insurance business, then you can't do your job effectively.