The new agreement ends the 2005 settlements that barred the brokers from accepting contingent commissions. Those strictures were applied after a 2004 investigation turned up evidence that brokers were steering commercial clients to insurers involved in a price-fixing ring that paid them hidden commissions.

According to filings with the Securities and Exchange Commission, under the new agreement, the brokers will comply with the New York agent/broker disclosure regulations and use those same regulations in all 49 states, Washington, D.C. and all U.S. territories.

Under the New York rule, adopted earlier this month for 2011 implementation, agents and brokers must describe their role in the insurance transaction and how they are paid. More detailed information will have to be provided at the client's request. The Independent Insurance Agents & Brokers of New York has said it will sue to block the new regulation.

The new agreement calls for brokers to maintain their existing compliance and training programs aimed at preventing the alleged abuses uncovered in 2004-2005.

The brokers are barred from leveraging their clients business in exchange for "production of business to such insurers."

The brokers have agreed not to act in any manner that is contrary to the best interests of the client when placing wholesale business.

The New York Attorney General and the Superintendent of Insurance reserve the right to take action if the brokers fail to meet their obligations under the agreement.

A statement issued by the New York Department of Insurance said the amended terms would provide "the transparency necessary to ensure fair and equitable treatment of clients and prevent a recurrence of the abuses addressed in the original settlement agreement, while allowing the three large brokers access to the same compensation agreements as their counterparts."

The department said the change came after a thorough review of the three brokerages' compliance efforts and reflects a desire by regulatory authorities to provide a level playing field for all brokers.

The department noted that a push to end contingent commissions for all brokerages did not materialize and this made "it difficult for consumers to easily and accurately compare compensation and incentives, thus distorting the market." This agreement would end that inequity.

Robyn Ziegler, press secretary for Illinois Attorney General Lisa Madigan, noted that the state's interests only applied to Aon, which is based there.

In an e-mail she said the office agreed to the modification of the agreement and lifting the ban on contingents effective Feb. 11, but still requires "complete and transparent disclosure of its compensation arrangements with insurers."

She said the investigations by the four states ended the "egregious practices that led to those investigations."

"We have sent a message to the insurance industry that transparent disclosure is the best practice, consistent with the brokers' fiduciary relationship with their clients," she said.

She noted that after complying with the terms of the settlement, Aon has been left "at a competitive disadvantage, particularly in this difficult economy," because others still accept contingents.

In lifting the ban, the attorney general and the Department of Insurance would continue to support moves to require "all insurance brokers and carriers to fully disclose their compensation arrangements to current and prospective clients."

In a statement, Chicago-based Aon's President and Chief Executive Officer Greg Case said "Aon very much appreciates the moves made toward consistent business practices for all brokers. However, our overriding consideration is to act in the best interests of our clients at all times. Aon will continue to lead the industry in terms of delivering value to our clients, including helping our clients fully understand what we do, how we do it, and how we get compensated."

Aon added that it is still bound by settlement agreements it reached with the State of Florida and National Association of Insurance Commissioners, which strengthens disclosure to clients and has put limits on commissions.

Willis said in a statement that unlike the other brokers, it entered into its agreement voluntarily and plans to continue to aggressively push its principals of "trust, transparency and disclosure." The broker added that it has no plans to begin accepting contingent commissions "whether or not our competitors follow our lead."

In an e-mail, New York-based MMC said, "Marsh & McLennan is committed to integrity and transparency, and to serving our clients' best interests. The actions by the New York State Insurance Department and the New York Attorney General have helped to restore a level playing field for MMC and other insurance intermediaries. We commend the NYSID and NYAG for applying consistent, mandatory compensation disclosure standards across our industry."

In an analyst's note, Meyer Shields with Stifel Nicolaus said there was no downside to the agreement, which translates into a drop in expenses for compliance, better competitive positioning, and resumption of collection of some contingents by Marsh and Aon.

RIMS said it was dismayed by the New York Insurance Department and Attorney General's decision, which it said "comes on the heels of [insurance department] disclosure requirements that do not afford consumers appropriate protections. The investigations, admissions, and fines that led to the 2005 agreements banning such commissions prove that these practices can be, and were, manipulated at the expense of the insurance consumer.

"Without strong consumer protections in place, RIMS has strong reservations about a policy that permits contingent commissions again, and this development illustrates why RIMS so vigorously fought for a stronger rule," the group's statement said in part.