Independent insurance agents approached the criticisms from New York Attorney General Eliot Spitzer and other officials with a measured game plan that has worked to preserve contingency commissions in agencies across the country.
“We did not lose our heads over this… We came up with a very good game plan and so far it has panned out,” Robert Rusbuldt, chief executive officer of the Independent Insurance Agents and Brokers and an architect of the plan to save contingent commissions, tells Insurance Journal in an exclusive video interview on Insurance Journal Web site. “We knew the facts were on our side,” he says.
Rusbuldt said his organization redirected resources and worked closely with state affiliates and insurance companies after Spitzer launched his investigations in late 2004. Spitzer uncovered “grotesque illegal activities” at some of the nation’s largest insurance brokers, which operate far differently than typical independent insurance agencies, according to Rusbuldt.
What concerned independent agents, however, was the accompanying attacks on independent agencies and their contingent commissions, which Rusbuldt defends as legal and “part of the American way.”
He said his group made a good case that “there is nothing illegal or unethical about incentive compensation” and eventually Spitzer and other officials went back to focusing on illegal activities
“So we have been proactive in this area and independent agents are positioned quite well after the initial bombshell,” he says.
Agents are still working with states on transparency and disclosure issues but the furor over incentive compensation seems to have subsided, he adds.
In the three-part interview, the Big “I” executive also discusses the role of money in politics, the upcoming 2006 mid-term elections, flood insurance reforms and more.
For the complete video interview, visit www.insurancejournal.com/broadcasts/
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