At least four agents' groups have publicly attacked deals by major insurers that end contingent compensation fees for agents and brokers in the aftermath of a regulatory settlement announced by St. Paul Travelers this month.
On Aug. 1, St. Paul Travelers said it agreed to stop paying contingents as part of an agreement with attorneys general of New York, Connecticut and Illinois as well as the New York State Department of Insurance to settle charges of accounting fraud, bid-rigging and improper finite reinsurance dealings.
Michael D'Arelli, vice president of legislative and regulatory affairs for the Western Insurance Agents Association, was first to launch an attack denouncing the deal and others like it. "The overwhelming majority of agents and brokers go the extra mile...to engender the public's trust and confidence, he said in a statement, adding that "poorly contrived settlement agreements that smack of cowardice and an implicit admission of wrongdoing erode that trust and confidence."
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