NU Online News Service, Nov. 3, 2004, 5:34 p.m. EST
The Council of Insurance Agents & Brokers, Washington, is suggesting that states ought to take a national approach to addressing the contingency commission issue.[@@]
The National Association of Insurance Commissioners, Kansas City, Mo., recently formed a task force to review allegations by New York Attorney General Eliot Spitzer that some of contingency commission arrangements might be misleading customers.
Insurers have been paying contingency commissions to brokers who bring them large amounts of commercial business for year, but Congress and several state regulators have followed up on Spitzer’s investigation with reviews of their own.
Critics of contingency commissions say commercial insurance customers who are paying commissions directly to brokers may not realize that the brokers also are receiving commissions from the insurers.