Should all New York insurance intermediaries be denied the opportunity to earn contingent commissions because mega-brokers were forced to give up that lucrative revenue stream as part of settlements of bid-rigging allegations? I don't think so–but on the other hand, perhaps it's time to reconsider the ban hamstringing the big firms as well.
“There should be a level playing field in our industry. That doesnt exist on the brokerage industry landscape today, declared Don Bailey, CEO of Willis North America, who called for a ban on all such side deals at a hearing before the New York Insurance Department this month in Buffalo. (Click here for the complete story.)
Because all but the major brokers accept contingents, the larger firms are operating at a competitive disadvantage, he added. We are constrained in our ability to compete on price with those who still accept contingents. Its a simple fact that brokers who accept contingent commissions are essentially getting a subsidy from insurers on the prices they offer clients.
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