This month, former New York State Attorney General Eliot Spitzer moved into his new digs in the Empire State's governor's mansion. But before stepping down as the state's top lawman, he added one more notch to his gun. Just a few days before Christmas, he announced a settlement with Chubb, in which the attorneys general for Connecticut and Illinois also participated. Chubb reportedly initiated the talks and got off pretty lightly. Spitzer took exception to some of Chubb's practices, including forgiving loans made to producers in exchange for business. Chubb agreed to sin no more and handed over $15 million in restitution and another $2 million in costs.

In settlements Spitzer previously negotiated with other insurers, they agreed to stop paying contingent commissions on certain products. Chubb's deal, however, calls for it to stop paying them on all lines of business. To its credit, the carrier announced that it also will implement a new supplemental producer compensation system, intended to make up for the loss of contingencies. Nonetheless, the settlement was another victory for what looks like a state politician's determined effort to intimidate the insurance industry into getting behind his vision of acceptable producer compensation–not just in New York but throughout the country.

Spitzer's campaign has been singular in its refusal to consider nuance or degree. For him, contingent commissions are a black-and-white issue, and they are wrong–period. How contingent commissions are calculated is not relevant to him; nor does he acknowledge differences among the kinds of producers who receive contingencies. It is this utterly inflexible attitude that has infuriated so many people in the insurance industry–particularly independent agents.