Gallagher to accept commissions
Arthur J Gallagher will start accepting contingent commissions on its retail broking business from October 1.
In announcing its second-quarter results, the global brokerage says it has received approval from the Attorney-General and the Department of Insurance in their HQ state of Illinois to again accept commissions.
The announcement comes after Willis Chairman and CEO Joe Plumeri in June urged the industry to take the lead and abolish contingent commissions. Willis voluntarily banned the practice in 2004.
The Risk and Insurance Management Society (RIMS) says it is disappointed about the decision and has urged Arthur J Gallagher to use the compensation disclosure requirements that were part of a 2005 agreement signed by brokers.
“Contingent commissions should be broadly prohibited as they represent an inherent conflict of interest,” RIMS said in a statement.
Gallagher predicts the contingent commissions will generate revenues of $US10 million a year by 2011.
The brokerage reported net earnings of $US43.8 million ($53.6 million) for the quarter, up from $US40.8 million ($50 million) for the same period last year, and $US70.2 million ($85.9 million) for the first six months of the year, up from $34.8 million ($43 million) a year earlier.
In announcing its second-quarter results, the global brokerage says it has received approval from the Attorney-General and the Department of Insurance in their HQ state of Illinois to again accept commissions.
The announcement comes after Willis Chairman and CEO Joe Plumeri in June urged the industry to take the lead and abolish contingent commissions. Willis voluntarily banned the practice in 2004.
The Risk and Insurance Management Society (RIMS) says it is disappointed about the decision and has urged Arthur J Gallagher to use the compensation disclosure requirements that were part of a 2005 agreement signed by brokers.
“Contingent commissions should be broadly prohibited as they represent an inherent conflict of interest,” RIMS said in a statement.
Gallagher predicts the contingent commissions will generate revenues of $US10 million a year by 2011.
The brokerage reported net earnings of $US43.8 million ($53.6 million) for the quarter, up from $US40.8 million ($50 million) for the same period last year, and $US70.2 million ($85.9 million) for the first six months of the year, up from $34.8 million ($43 million) a year earlier.