CIAB Throws Darts At PIA Over Fee Controversy

By Daniel Hays

NU Online News Service, April 19, 9:35 p.m. EDT?The controversy ignited by an insurance brokerage executive's call for the entire industry to abandon scandal-plagued incentive fees continued today with a brokers group attacking an agents organization.[@@]

At issue were the remarks by Joseph Plumeri, chief executive officer of Willis, who was excoriated by the National Association of Professional Insurance Agents (PIA) after he appeared Monday at the annual conference of the Risk and Insurance Management Society (RIMS) and said there should be an end to contingent commissions that encompassed independent retail agents as well as large brokerages.

His remarks came only two weeks after his firm agreed to repay customers $51 million for improper charges involved with placing client business on the basis of fee arrangements with select insurers rather than seeking competitive prices.

The PIA said the comments coming from Plumeri were a "hypocritical suggestion" and the timing in the wake of his firm's settlement was dubious.

Leaping to Mr. Plumeri's defense today was the Washington-based Council of Insurance Agents & Brokers (CIAB) President Ken A. Crerar.

"We take issue with PIA's attack on a prominent leader in the brokerage business. Inflammatory words such as "dubious" and "hypocritical" are wrong and misguided," declared Mr. Crerar.

He said his organization, "will never attempt to dictate a business model to its member firms or the broader industry. Persons of goodwill may have honest disagreements about incentive compensation."

Mr. Crerar added that the PIA "is missing the point entirely ? full and complete compensation transparency by insurance producers. Clients deserve it and many are demanding it. The regulatory inquisition of recent months is leading us inexorably to that industry standard.

"Yet PIA and others seem to think that transparency is good only for some commercial insurance transactions. The sooner industry groups stop finger-pointing and disparaging one another and support a standard for compensation disclosure ? such as the NAIC [National Association of Insurance Commissioners] model law ? the more trust we'll earn from consumers, and we can all move on. We have nothing to hide."

The CIAB represents the nation's large commercial insurance brokers who annually write more than 80 percent of commercial property-casualty premium.

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CIAB Throws Darts At PIA Over Fee Controversy

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