News Briefs

June 6, 2005

ILLINOIS

Gallagher Reaches Agreement With AG, DOI on Contingent Commissions: Arthur J. Gallagher & Co. recently reached a comprehensive agreement with Illinois’ attorney general and insurance director to resolve issues related to industry-wide investigations surrounding contingent commissions. There was no lawsuit involved nor were there any findings of unlawful or deceitful conduct or that any client had been disadvantaged, the company said in a statement. Gallagher admitted no wrongdoing or liability and is not required to issue an apology.

Specifics of the agreement include: (1) Creating a $27 million fund for certain retail clients. No portion of the fund represents a fine or a penalty. (2) Eliminating contingent commissions for retail clients. In October 2004, Gallagher voluntarily announced it would not enter into retail contingent commission agreements beginning Jan. 1, 2005. (3) Disclosing compensation for services to retail clients. (5) Providing enhanced training for employees in business ethics and compliance matters. (6) Creating a compliance committee of the board of directors.

Insurers Happy With Iowa: Insurers hailed Iowa politicians for passing legislation they favored and rejecting several measures they said would have worsened the state’s insurance marketplace. In the closing hours of the state’s legislative session, a bill focusing on workers’ compensation was passed. The bill, Senate File 342, will take effect this July if signed and would allow paid time off for medical treatment and increases flexibility in claim settlement.

Gov. Tom Vilsack, a Democrat, signed into law on April 28 Senate File 360, the insurance department’s omnibus legislation. Provisions in this bill, according to the Property Casualty Insurers Association of America, include strengthening eligibility standards for the guaranty fund, changing the membership of the governing board of the FAIR Plan to reflect the merger between the Alliance of American Insurers and National Association of Independent Insurers and revising existing statutes on service contracts for the repair or replacement of certain motor vehicles, investments of county or state mutual associations. The provisions in the bill that apply to property/casualty insurers take effect July 1.

MICHIGAN

Survey: Consumerism Gaining Foothold in Mid-Market Benefit Plans: Troy, Mich.-based benefits broker McGraw Wentworth said its recent survey of Southeast Michigan mid-market employers showed increased interest in consumer-driven health plans. According to the survey of 465 employers, while only 5 percent offer a consumer-driven health plan in 2005 (up from 2.6 percent in 2004), 19 percent indicated they are considering implementing one in 2006. The survey also found that health plan cost increases for 2005, which averaged 9 percent after plan changes, were below last year’s increase of 11 percent, but above the national average of 7.5 percent. The organizations surveyed represent an aggregate of nearly 400,000 employees and nearly $3.3 billion health-care dollars.

MISSOURI

Bill Would Make Complaints Against Carriers Confidential.

Among the many bills sent to Missouri Gov. Matt Blunt’s desk on the final day of the session is one that would make consumer complaints about insurance companies confidential. Supporters say that House Bill 388 is about consumer privacy. But some lawmakers say it would primarily benefit insurance companies, making it harder for consumers to learn about alleged wrongdoing.

The bill would close consumer complaints filed with the state insurance department, as well as any documents filed with the agency related to an investigation of an insurance company. Those documents could be obtained only through a subpoena or if the department director opts to release them in the public interest.

The Associated Press contributed to this report. To submit information for this department, e-mail: koreilly@insurancejournal.com.

Topics Carriers Legislation A.J. Gallagher

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