Willis challenges insurers to dump volume commissions
Willis North America CEO Don Bailey has called for the abolition of contingent commissions and questioned the integrity of brokers making money from volume business.
Mr Bailey made the comments last week in an address to the New York Superintendent of Insurance and Attorney-General at a public hearing into insurance producer compensation standards and disclosure.
He says contingent commissions undermine the key requirement for brokers to act in the best interests of clients.
“We believe that brokers should be paid for the quality of service they provide, not for the volume of business guided to a carrier and not for the profitability of a client to a carrier,” he said.
Mr Bailey wants the insurance industry to abolish contingent compensation and also called for transparency in broker compensation.
“Otherwise [clients] will question the integrity of the services we provide,” he said. “We believe client trust is non-negotiable.”
Willis voluntarily dumped contingent commissions in 2004 and Chairman and CEO Joe Plumeri has been an outspoken critic of the practice. The issue is currently under review by the New York State Insurance Department.
Mr Bailey made the comments last week in an address to the New York Superintendent of Insurance and Attorney-General at a public hearing into insurance producer compensation standards and disclosure.
He says contingent commissions undermine the key requirement for brokers to act in the best interests of clients.
“We believe that brokers should be paid for the quality of service they provide, not for the volume of business guided to a carrier and not for the profitability of a client to a carrier,” he said.
Mr Bailey wants the insurance industry to abolish contingent compensation and also called for transparency in broker compensation.
“Otherwise [clients] will question the integrity of the services we provide,” he said. “We believe client trust is non-negotiable.”
Willis voluntarily dumped contingent commissions in 2004 and Chairman and CEO Joe Plumeri has been an outspoken critic of the practice. The issue is currently under review by the New York State Insurance Department.