Willis rejects commission scheme
US-based broker Willis has rejected a revised contingency commissions scheme, saying any system that rewards brokers for placing business with an underwriter is tainted.
An incentive plan backed by Travelers Companies and Chubb Corp was put to the main brokerage firms this year, allowing brokers to accept fees in a similar way to contingency commissions.
Under settlements reached with then New York Attorney-General Eliot Spitzer in 2005 and 2006, Willis, Marsh & McLennan and Aon are barred from accepting contingency payments.
Fines of more than $US2 billion ($3.5 billion) were paid by brokers in Mr Spitzer’s blitz on contingency commissions last year. Marsh & McLennan alone settled for $US850 million ($1.03 billion).
Travelers and Chubb argue their proposal is legal under the agreements reached with Mr Spitzer, but Willis Chairman and CEO Joe Plumeri says the company will not accept the incentives arrangements.
Marsh & McLennan and Aon have yet to comment.
An incentive plan backed by Travelers Companies and Chubb Corp was put to the main brokerage firms this year, allowing brokers to accept fees in a similar way to contingency commissions.
Under settlements reached with then New York Attorney-General Eliot Spitzer in 2005 and 2006, Willis, Marsh & McLennan and Aon are barred from accepting contingency payments.
Fines of more than $US2 billion ($3.5 billion) were paid by brokers in Mr Spitzer’s blitz on contingency commissions last year. Marsh & McLennan alone settled for $US850 million ($1.03 billion).
Travelers and Chubb argue their proposal is legal under the agreements reached with Mr Spitzer, but Willis Chairman and CEO Joe Plumeri says the company will not accept the incentives arrangements.
Marsh & McLennan and Aon have yet to comment.