RIMS Talks Disclosure Behind Closed Doors

By NU Staff

NU Online News Service, April 19, 10:47 a.m. EDT, Philadelphia?The Risk and Insurance Management Society banned the press today from covering sessions on the broker contingency fee scandal that had led the group to call for full disclosure and complete transparency in business relationships with brokers and insurers.[@@]

RIMS' non-disclosure policy for back-to-back sessions comes after RIMS lobbied on behalf of commercial insurance buyers for full disclosure of broker compensation and complete transparency in all deals with intermediaries and their carriers.

The lobbying effort followed New York Attorney General Eliot Spitzer's Oct. 14, 2004 release of damning e-mails showing brokers conspiring with carriers to rig bids and steer accounts to certain carriers in return for lucrative incentive fees.

RIMS offered no specific reason for its decision to keep the broker fee discussions from the public, beyond saying that closings are determined by session coordinators and are sometimes requested by members.

To help its members cope with the new emphasis on broker accountability and make sense of whatever information might be disclosed to risk managers, RIMS devoted a two-part, three-hour session this morning to "Broker Contingency Fees, What You Should Know."

RIMS said the meeting would "review types and amounts of contingency fees involved in placement service agreements" as well as "examine insightful legal and ethical issues in evaluating broker services."

Attendees were to hear a panel discussion including a risk manager, a RIMS official, and a regulator from the New York Insurance Department, among others including Vivian Menna, a managing director at Marsh brokerage, which agreed to repay $850 million to clients and change its fundamental business practices as a result of a deal struck with Mr. Spitzer.

The session was restricted to attendance by risk managers only. Brokers, insurers and the press were not permitted to observe.

RIMS declined to rescind its decision to ban the press from the event, despite a joint appeal from National Underwriter and other publications in attendance.

"We appreciate the interest of the media in attending RIMS 2005 in Philadelphia," said RIMS President Nancy Chambers, in an e-mail response to NU's request for access. "The mission of RIMS is to provide educational opportunities and respond to the needs of our members. With the current focus on contingency fees, the conference is offering a number of sessions, as well as a keynote panel on this topic. The sessions range from 'open sessions,' to 'risk manager attendees only,' as determined by the session coordinators in consultation with the speakers. Our members sometimes request a session be closed."

In response, NU Editor-In-Chief Sam Friedman wrote to Ms. Chambers: "I frankly fail to see the wisdom of closing any contingency fee sessions to the press. If RIMS' mission is to provide educational opportunities, how can the organization pass up the opportunity to get the word out to thousands of risk managers not attending the sessions on how to cope with the new era in broker compensation? Also, at a time when RIMS is preaching the need for complete transparency and full disclosure, it seems to defeat the purpose to hold a session on such issues behind closed doors.

"This is a very unfortunate decision on the part of RIMS. It denies thousands of our risk manager readers the opportunity to benefit from the information provided. RIMS should not only not be closing such a session, it should be broadcasting it over the Web so that all risk managers can access this information," he added. RIMS did hold a public session on the Marsh agreement titled--"Hot Topic: The Marsh Settlement--Should Policyholders Opt In?.

Special Reports /

RIMS Talks Disclosure Behind Closed Doors

Related Stories

Recommended For You