"The reason is, the only way that you can be brokered?meaning that somebody could bid-rig you?is if there is no relationship between you and that underwriter," he explained.

Mr. Buckley spoke at the monthly meeting of the Association of Professional Insurance Women here.

"One of the reasons I've always been comfortable is that I know all my underwriters," he said later in an interview, adding that his underwriters are comfortable knowing they can report any suspicions to him. "If somebody was doing something, I'd hear about it," he said. "It has to be a three-legged stool: you the risk manager, the broker and the underwriter."

Through the years, he said, a number of risk managers have relied too much on their brokers. This, Mr. Buckley said, is an inherent conflict because the broker ends up making risk management decisions.

"The broker is nothing more to me than an extension of my risk management organization, who has access to the marketplace, to tell me what's going on." At the end of the day, he said, "I have to be in a position to make the decision."

Can a broker influence a risk manager's decision-making? "Absolutely," he noted. The risk manager needs to be sure the broker's influence is in his or her best interest. "Is what they are presenting to you logical?" he asked. If not, "you need to ask why this doesn't make sense."

Mr. Buckley added that some risk managers are afraid to speak up when they don't understand something.

"When I first became a risk manager I came from a claim environment," he said. "I was good at stopping someone and asking them to explain it and make it logical. If he couldn't make it logical to me, it was usually because it was wrong."

On broker relationships, he told NU, "I have always been on a fee-based relationship with my brokers." He added, "I was screaming in '89 and '90 about why I felt [technical service agreements] were a conflict, and the New York Insurance Department failed to do anything about it."

New York State authorities have charged that such incentive fees amounted to hidden kickbacks brokers were provided for steering business to select insurers.

Mr. Buckley said the brokers' position was that the TSAs they received were compensation for work being done on behalf of the carrier. "Therefore," he noted, "they have given up the opportunity to collect that and they should not be trying to recover that from me and the risk management community."

Mr. Buckley noted that if brokers operate "on the model that says they will walk away from unprofitable business, then it will be a more profitable company and I will get the service I need and pay for."

He explained that brokerages have said they will "walk away from certain lines of business or certain customers that aren't profitable."

If they don't live up to this standard, he added, "in the end, I'm going to get shortchanged and I'm not willing to accept that."