Bucking a trend among the largest insurance brokerage firms, Acordia said it intends to continue accepting contingent commissions despite being sued over the practice by the West Virginia attorney general.
Ellen Sievert, director of communications for the Chicago-based insurance brokerage firm, delivered the following statement: "We believe contingent commissions, properly administered, are not inconsistent with the responsibility of our brokers to their customers. At this time, Acordia will continue to accept contingent commissions, subject to our processes and procedures for customer disclosures, which are based on a recommended model by the National Association of Insurance Commissioners."
Last week, West Virginia Attorney General Darrell McGraw announced a suit against Acordia, which is a subsidiary of San Francisco-based financial services company Wells Fargo, accusing the broker of hiding the payment of contingent commissions it received from insurers from clients.
Mr. McGraw alleges that the payments "were unfair and deceptive and resulted in less competition for insurance," which in turn drove up the cost of insurance. His office said the evidence is similar in nature to that included with complaints by New York Attorney General Eliot Spitzer in suits against other insurance brokers.
"The world's largest insurance brokers already have sworn off secret payments. I expect Acordia to be next," Mr. McGraw added.
The West Virginia Attorney General's Office did not have an immediate comment on Acordia's statement.
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