Marking the first formal congressional inquiry since allegations of abuse in the commercial insurance brokerage industry emerged last month, U.S. Senator Peter Fitzgerald (R-Ill.) will chair a Senate subcommittee oversight hearing of insurance brokerage practices on Tuesday, Nov. 16, at 10:30 a.m. in SD-342 in Washington, D.C.
Titled, “Oversight Hearing on Insurance Brokerage Practices, Including Potential Conflicts of Interest and the Adequacy of the Current Regulatory Framework,” Fitzgerald called the hearing in his capacity as chairman of the Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security.
Tuesday’s hearing follows recent allegations of collusion between insurance companies and brokers that include bid-rigging, kick-backs, and other abuses that have hurt large corporate buyers of insurance. Among other things, the subcommittee will focus on the controversy over contingent commissions that some commercial brokers obtain from some insurers, and inquire whether this form of compensation creates a conflict of interest that is not disclosed to the companies buying the insurance.
The subcommittee will also explore whether the revelations of wrongdoing suggest any need for altering the current regulatory framework to promote greater accountability among industry players.
The subcommittee will hear from New York Attorney General Eliot Spitzer, Connecticut Attorney General Richard Blumenthal, California Insurance Commissioner John Garamendi, New York Insurance Superintendent Gregory Serio, and leading industry and association groups.
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