Global insurance broker Willis Group Holdings has signed an agreement with the New York Attorney General and the Insurance Department of New York amending the previous agreement banning receipt of all contingent payments.
The change clears the way for Willis to accept contingency payments from insurers but only when it is performing functions as a managing general agent (MGA) .
Marsh, Inc. reported signing a similar amendment last week.
The new pact modifies the 2005 agreement that banned all contingent commissions or profit sharing deals involving payments based on the volume of business Marsh placed with various insurers.
Aon Corp. Arthur J. Gallagher & Co. all signed similar agreements to forfeit contingent commissions.
Willis said the amendment recognizes that in MGA operations the company is representing, acting on behalf of, and performing services for the insurer and therefore provides flexibility as to the insurer compensating Willis for these services.
“We’ve always received even treatment from the Attorney General’s Office; we expected this determination and are pleased with this amendment to our AOD,” said Joe Plumeri, Willis Group chairman and CEO.
“When working as an MGA, we represent the interests of an insurance company so this change … is consistent with our position of being paid by our client. It also reaffirms our commitment to full transparency – such that there are no questions as to who we represent. Further, I appreciate the Attorney General’s willingness to engage in this conversation to gain a thorough understand of the many nuances of the insurance broking business model.”