Spitzer Broker-Insurer Inquiry Expanding
By Daniel Hays
NU Online News Service, Sept. 1, 3:19 p.m. EDT?AXIS Capital Holdings Ltd. has become the latest insurer subpoenaed in New York Attorney General Eliot Spitzer's expanding investigation of insurance brokers' acceptance of controversial incentive commissions.[@@]
AXIS announced today that its U.S. holding company in New York received the subpoena from Mr. Spitzer's office.
The Pembroke, Bermuda-based company announcement said John Charman, AXIS Capital chief executive officer and president, has stated that AXIS Capital is "more than happy to fully cooperate with this inquiry" and the attorney general's request for "information regarding incentive commission agreements between its insurance companies and insurance brokers."
AXIS Capital is a post-9/11 startup company providing property-casualty insurance and reinsurance. Its U.S. insurance operation is based in Alpharetta, Ga. with operations in New York, Connecticut and Illinois.
A spokesperson for AXIS said the subpoena was delivered to the company Aug. 26. In June, Mr. Spitzer subpoenaed three large insurers on the life and health side of the business--Aetna Inc., Cigna Corp. and MetLife. MetLife said then it was asked for information about "certain compensation agreements between insurance brokers and MetLife companies" and that it would cooperate fully.
Mr. Spitzer's office would not comment yesterday on the investigation into possible conflicts of interest, which first became public in late April with disclosures by the Aon, Willis, Kaye Group and Marsh brokerages that they had been subpoenaed.
The brokerages have said the fee arrangements?also known as market service agreements, placement service agreements, or contingent commission agreements--are a longstanding practice and that they have disclosed them to clients.
A number of the brokerages have been the target of suits by insurance clients seeking restitution and damages for what they charge were the firms' acceptance of hidden "kickbacks" to place their business.
Critics of the fees suggest that in order to obtain them, brokers might be willing to advise clients to accept overpriced, unneeded or insufficient coverage.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.