Mr. Vincelette spoke at a teleconference with members of the Public Risk Management Association.

He advised that risk managers should "first determine what your impact is and had been in the past, and what you can do for the future," adding that there are "warning signs that may indicate that your business may have been involved in some form of manipulation."

One such warning sign is premiums that have increased when the market is decreasing, "and there is no correlation to an adverse trend in loss experience?then you've got a little flag," Mr. Vincelette said. "Now flags don't mean something is wrong, but it means it's unusual and something you should look at."

Another possible flag is a broker who is reluctant to discuss or disclose total account-specific compensation. He clarified that most contingent agreements and most incentive compensation agreements were on books of business and not account-specific.

"So every account that was placed there added up to a total," he noted. "What amount is applicable to an individual account? If it's a volume incentive, it could be the percentage of premium." If it is based on profitability, however, "that is a whole other calculation based upon the individual account profitability."

Mr. Vincelette cautioned that it can be difficult for large brokers, especially those with segregated parts to their organization, "to be able to track in one place all of their compensation."

An insurance subsidiary, for example, could be using a separate computer system from the retail brokerage, he noted.

"So, now you have two systems that are otherwise separate and distinct, and that is the case in many of these organizations," Mr. Vincelette commented, adding, "But they should be willing to at least tell you what some of the difficulties may be. And/or they should be willing to amend the contracts so that it requires them to disclose any compensation or total account compensation."