The controversy over contingency fees grew ugly this year, with some big brokerages calling for an end to the bonus commissions that got them into trouble with regulators in the first place, and independent agents literally telling their bigger brothers to shut up and take their medicine without penalizing honest producers.
New York Attorney General Eliot Spitzer and his colleagues made headlines last year by striking settlements of bid-rigging allegations against Marsh, Aon and other mega-brokers, including agreements to no longer accept retail contingency fees. Mr. Spitzer had charged crooked brokers of conspiring with selected carriers to rig bids and steer clients to reap the bonus commissions.
Sore over losing a very lucrative revenue stream, a number of top dogs at the big brokerages suggested that regulators would not tolerate a bifurcated compensation system for long, and suggested such fees might best be tossed aside altogether.
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