Talk about playing right into your competitor's hands! Last week Aon announced plans to start taking contingent commissions once again, right after one of its biggest rivals–Willis Group–blasted the controversial practice and reiterated it would never again accept volume- or profitability-based bonuses.

As reported last week in National Underwriter (http://bit.ly/agTZe1), Aon said it is exploring "various forms of alternative remuneration available."

Steve McGill, CEO of Aon Risk Solutions, said his brokerage–while still committed to transparency–"conducted a great deal of research around broker compensation," with the aim of competing "on a level playing field…As a result, we have decided to accept various forms of compensation available, which may include supplemental and/or contingent commissions in the geographies and client segments globally where appropriate and legally permissible."

Contingent commissions had been banned since 2005 for Aon and Willis, as well as Marsh and Arthur J. Gallagher, under an agreement with a trio of state attorneys general, following allegations of bid-rigging and account steering.

While the big brokers accepted the ban–without admitting any wrongdoing–to keep their reputations from being further dragged through the mud by Eliot Spitzer and friends, all four have been seething ever since about the fact competitors were still reaping contingency income.

Only one–Willis–has consistently argued that no broker purporting to represent the client should ever accept contingents because of the potential conflicts inherent in such compensation schemes.

The ban has been lifted, in return for an agreement by the brokerages to meet commission disclosure requirements to be imposed by the New York Insurance Department on all producers doing business in the state starting Jan. 1. (See http://bit.ly/bmPx3k for details.)

Marsh, which is entering the independent agent market via a new subsidiary that's buying up agencies, says it will not accept contingents on its "core business" in the United States and Canada. But Aon appears to be going in the opposite direction.

I can appreciate the pressure Aon must feel to find a new revenue source with the soft market sending prices (and straight commissions) plummeting, and insurable exposures disappearing in a shrinking economy. But I'm surprised to see Aon resurrecting the contingent option, especially given bitter opposition voiced by the Risk and Insurance Management Society, which "views Aon's intentions as a step backward with regard to the level of service it provides to its clients."

Willis CEO Joe Plumeri has been characteristically blunt in his blistering critique, characterizing Aon's announcement as "a wake-up call to all risk managers and buyers of insurance to reevaluate whether their broker really works for them or the insurance carrier."

Willis argues that volume bonuses give brokers a strong motive to place accounts with carriers offering the most lucrative contingent, rather than the best price, coverage or service. Mr. Plumeri sees deals based on the profitability of a book of business as even worse, creating a perverse incentive to not get claims paid so the bonus will be triggered.

Aon says it plans to meet or exceed all requirements for transparency globally, but Willis says transparency is not enough to assure integrity.

The marketplace will ultimately decide this issue. Are individual risk managers as concerned about contingents as are their association officers? Will they take the time and effort to study and understand bonus plans disclosed to them? Will they insist that brokers refuse to include their accounts in any contingent plan, or will they vote with their premiums and take their business elsewhere?