Willis Chairman and CEO Joe Plumeri has defended plans to reinstate contingency commissions in the US after years of crusading against the controversial payments.

Breaking with company policy dating back to October 2004, Mr Plumeri announced last week that Willis will accept commissions on employee benefits lines from April 1.

He claims the move was forced by US insurers, who “changed the nature of the game” by paying brokers per tier based on volume, and the only way Willis can remain competitive is to accept commissions.

Willis says the move is “unique to the employee benefits business and only applies to North America” and won’t be replicated elsewhere.

“Willis remains committed to maintaining its strong stance against traditional contingent compensation across all other product lines,” spokesman Miles Russell told insuranceNEWS.com.au.

Despite Willis’ assurances, the move has rankled risk managers, who say it is hypercritical given the company’s previous stance.

Under settlements reached with then New York Attorney-General Eliot Spitzer in 2005 and 2006, Willis, Marsh & McLennan and Aon were barred from accepting contingency payments and paid
fines of more than $US2 billion ($3.5 billion).

Willis continued to work without commissions even after the ban was lifted in 2010, the same year Mr Plumeri launched the website clientsbeforecommissions.com. The website has since been deactivated, but Willis would not reveal when it was shut down or why.

In 2010, Mr Plumeri said disclosing commission fees to clients is no panacea.