Chicago-based Aon Corporation on Friday announced that it is eliminating its practice of accepting contingent commissions from underwriters.
Patrick Ryan, chairman and CEO, said, “Because trust and client satisfaction are top priorities for all of us at Aon, we are discontinuing a practice that has created enormous controversy and confusion. We cannot permit even the slightest impression of a conflict between acceptance of these commissions and our paramount obligations to our clients.”
The company said that it will provide more detail on contingent commissions and other compensation for services to underwriters in its upcoming third quarter earnings release and conference call. Earnings will be released after the market close on Thursday, October 28, with a conference call scheduled for 10 a.m. central time on Friday, Oct. 29. The webcast can be accessed at www.aon.com.
Ryan added, “We will work closely with insurance carriers, regulators and other constituencies to establish a new business model that ensures appropriate linkage of compensation to specific, measurable services in a way that is transparent, accepted and understood by our clients. We provide important services on behalf of underwriters; however, certain current compensation models must change.”
Aon reportedly has begun winding down contingent commission agreements and expects to complete the process by the end of 2004.