In our latest "Question Of Ethics" in this week's edition of NU (available online as well), we asked readers to tackle the dicey problem of how to reconcile potential conflicts that inevitably arise these days over any sort of contingency fee agreement. That argument might be moot if all carriers eventually end such bonus arrangements, but I cannot imagine there won't be other incentive compensation plans to take their place, which will raise their own conflict-of-interest issues.
The bottom line is that readers grapple with such potential conflicts by asking themselves the following questions:
• Who do you really work for? No one seemed concerned with the problems of dual-agency. Any conflicts that arise, given the state of the law, are resolved by producers in favor of the insured.
• Does it matter how you’re paid? Contingent commissions may create conflict-of-interest situations. The best type of contingent, to reduce these potential problems, is profit-based commissions.
• Is there a better way? Every form of sales incentive offered by any organization to its representatives creates the same sort of problem. Transparency of the contingent arrangement is not perceived to be an issue. No one but the critics care, readers believe.
• What’s really important? The debate should be over how to determine if coverage is sufficient, the premium fair and claims paid.
Is this how you folks deal with such issues? Read over the comments of your fellow readers in this week's article and let me know what you think and how you handle these problems.
