As everyone knows by now, megabroker Arthur J. Gallagher has received the blessingof Illinois regulators to resume the practice of collectingcontingent commissions nationwide starting in October, a movethat's expected to generate more than $10 million in earnings.

The practice, eliminated in 2004 as part of the fallout of amajor investigation by former New York AG Eliot Spitzer, hitAJG, M&M, Aon and Willis and caused a major ruckus in theindustry, especially among the industry's biggest brokers andinsurers, who are still smarting from billion-dollar fines and lostrevenues.

And AJG's decision has observers speculating on whether theother big brokers will try to follow Gallagher's lead to getcontingent commissions reinstated.

Not everyone is pleased with the news. Yesterday RIMS issued astatement expressing “disappointment” with themove, reiterating its belief that incentive commissions are aninherent conflict of interest, even though Gallagher vows topractice full transparency in the process.

The controversy harkens back to the original discussion ofwhether or not any sort of commissions, incentives or whatever youwant to call them are a conflict of interest — whether it's forplacing insurance or selling cars. Any sales-based cultureuses volume requirements and profitability goals as incentivesfor its producers to sell more. The rub lies in whether or not thecustomer knows or cares about what goes on behind the scenes.

We've all learned a lot since 2004. Transparency is now themantra, not just for insurance, but every other business,especially with the hot spotlight on government oversight offinancial services. You can be sure that in today's hypersensitivebusiness environment, any practice that smacks of collusion will bescrutinized, vilified and quashed — and rightly so.

It should be interesting to see whether AJG's decision willgenerate any backlash from those outside the industry — orif yesterday's atonements and adjustments have paved the wayfor a more lenient view of a practice that, when doneethically, is just part of a sales culture.