The Federation of European Risk Management Associations (FERMA) has issued a bulletin expressing concerns over a new ruling in the US state of Illinois that allows brokers to resume taking contingent commissions.
The bulletin said the association supports the “stance taken by US risk managers through the Risk and Insurance Management Society (RIMS). “The contingent commission discussion in the United States affects us since the major brokers are based there, and we serve the interests of our members even if this goes further than ‘our borders’. We live in a global village,” stated FERMA President, Peter den Dekker.
Historically, RIMS has argued that, in the absence of a ban on contingent commissions, brokers should disclose all forms of direct and indirect compensation to the customer. In Europe, FERMA has campaigned for a voluntary ban by brokers on accepting contingent commissions and for full transparency of compensation arrangements.
“This development in Illinois will fuel debate about the future of broker remuneration during the FERMA Forum in Prague on 4-7 October, which has the global village as its theme,” the bulletin continued.
“The French risk management association AMRAE has organized a workshop asking whether European risk managers should call for a mandatory net quoting system, now in effect in several European countries.”
FERMA pointed out that the “Illinois decision provokes other questions, such as why do US insurers continue to include a standard percentage of brokerage in their quotes and refuse to reduce it? What kind and what quality of services do we get from brokers for what remuneration? These questions will certainly be brainstormed during the workshop.
“The roundtable discussion on topical insurance issues on 7 October is also likely to provoke questions on the subject, especially since the moderators are two journalists, Herbert Fromme of FT Deutschland and Adrian Ladbury of Business Insurance. Senior executives from the two largest brokers, Gregory Case, President & CEO, AON and Dan Glaser, Chairman & CEO of Marsh, are among the panel members.”
The workshop speakers will be Anne-Marie Fournier, Risk Manager, PPR; Bruno Vesval, Deputy CEO Gras Savoye; Stanislas Chapron, President, Marsh, France; Jean-Paul Rignault, CEO, AXA Corporate Solutions, and Laurence Delaire, Deputy Director, Insurance Department, GDF Suez.
For the full text of the statement issued by RIMS, go to: http://www.rims.org/ABOUTRIMS/NEWSROOM/Pages/Newsroom.aspx
The FERMA Forum 2009 will take place from 4-7 October at the Congress Centre in Prague with the theme Global Village: the future of risk management. The program is available on the FERMA website at: www.ferma.eu.
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