Sen. Panel To Hold Broker Fee Hearing 11-16

By Arthur D. Postal, Washington Bureau Chief

NU Online News Service, Nov. 1, 3:20 p.m. EST?A Senate Governmental Affairs Subcommittee headed by retiring Sen. Peter Fitzgerald, R-Illinois, will hold a hearing on the broker fee controversy Nov. 16 in Washington, D.C.[@@]

An array of state attorneys general, industry trade groups, the Illinois insurance commissioner and a fellow of a conservative think tank based in Washington, who has been highly critical of New York Attorney General Eliot Spitzer, have been invited to testify.

A staff official at the Financial Management, Budget and International Security Subcommittee of the Governmental Affairs Committee confirmed that the hearing will be held.

A staff official of Sen. Fitzgerald was not available to comment. Sen. Fitzgerald's home state of Illinois also is headquarters of Aon, one of the targets of Mr. Spitzer's investigation. Sen. Fitzgerald will be retiring when his term ends in January.

His subcommittee members include some of the ranking members of the Senate, including Republican Sens. Ted Stevens, Alaska, powerful chairman of the Senate Appropriations Committee; Richard Shelby, Alabama, chairman of the Senate Banking Committee, and Arlen Specter, Pennsylvania, as well as Democratic Sens. Carl Levin of Michigan and Frank Lautenberg of New Jersey.

Deirdre Manna, acting Illinois insurance commissioner, will represent the National Association of Insurance Commissioners. She is a member of the working group established by the NAIC to look into the broker fee controversy triggered by subpoenas issued by Mr. Spitzer in April. The subpoenas called into question the legality of incentive fees paid by insurers to brokers, who are paid to represent companies to secure insurance for their businesses.

Also invited were Robert Hunter, director of insurance for the Consumer Federation of America; Attorneys General Spitzer of New York, John Garamendi of California and Richard Blumenthal of Connecticut; as well as officials of the Property Casualty Insurers Association of America, the Council of Insurance Agents and Brokers, the Independent Insurance Agents and Brokers of America, and the Cato Institute.

The Cato Institute fellow invited to testify, Alan Reynolds, was the author of a recent op-ed article in The Wall Street Journal highly critical of the investigation by Mr. Spitzer, calling it a "non-scandal." Mr. Reynolds argued in his article that eliminating the incentive fees paid by insurers to brokers will in the long run raise the fees companies pay to purchase insurance.

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Sen. Panel To Hold Broker Fee Hearing 11-16

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