The brokerage firms that have had to swear off contingent commissions following allegations of kickbacks, account steering and bid-rigging should quit trying to force the rest of the industry to give them up as well because a double standard should exist for those who have violated regulations, one agent association contends.
"This is America, where performance is rewarded, not punished," said Michael D'Arelli, vice president of legislative and regulatory affairs for the Western Insurance Agents Association, based in Rancho Cordova, Calif. "At this time, it would be wise for the large brokers and insurers who have already brought enough shame to the industry to sit down, take their medicine and shut up," he added.
Investigations led by New York Attorney General Eliot Spitzer uncovered evidence of improper conduct and conflicts of interest in the industry, prompting agreements by Marsh, Aon, Willis and Arthur J. Gallagher to give up contingency fees. Such volume-based compensation was blamed for giving brokers an incentive to steer accounts to those who paid the highest bonus incentives.
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