Insurance brokers in the US are once again free to accept payments from insurers for steering clients into their products.

The decision by the attorneys-general and insurance departments of New York, Illinois and Connecticut to reinstate contingency payments as legal transactions dismantles one of the prime achievements of former Governor Eliot Spitzer.

Mr Spitzer, who resigned in March 2008 amid revelations he was involved in a prostitution ring, rigorously pursued Marsh and McLennan Group, eventually fining the company $US850 million ($945 million) for market collusion.

Under new legislation, insurance brokers can accept contingency payments but must declare them to clients, a distinction Willis Global CEO Joe Plumeri believes is moot.

“Simply telling clients that you are taking contingents does not make it okay,” he said last week.

“It does not change the fact that you have an incentive to act in the interests of someone other than your client – and that when push comes to shove you might not fight for the best deal in the marketplace or advocate fiercely to recover a claim if you know your compensation from the insurer will suffer. It sounds like transparency, but it can never be true transparency.

“I am convinced that the only way to resolve the conflicts inherent in contingent commissions is to not take them.”

Willis has not accepted contingency payments since October 2004, but it’s understood Aon and Marsh will resume accepting payments.

The world’s fourth largest broker, Arthur J Gallagher, was released from a ban in 2009 and says it expects to net an additional $US10 million ($11.1 million) this year from extra commission.

Aon President Greg Case says that despite the move back to commissions, the group will “continue to act in the best interests of our clients at all times”.