How can contingency fee deals be reconciled with the producer'sethical obligation to clients? That's the latest “Question ofEthics” being posed to NU's readers by our ethics columnist, PeterKensicki, a professor of insurance at Eastern Kentucky University,as well as a member of the CPCU Society's Ethics Committee. Read onfor more details about this ethical challenge and how to respond,both in this blog and directly to Prof. Kensicki.
Prof. Kensicki notes that many agents–that is, those who representinsurers by contract–believe they act primarily in the interest ofthe insured. This “dual agency” status–representing both insuredand insurer–presents many potential conflicts of interest for aproducer.
Such conflicts came under the harsh glare of New York AttorneyGeneral Eliot Spitzer's spotlight when his probes revealed thatmajor brokerages schemed with carriers to rig bids to triggerlucrative, volume-based bonus commissions.
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