Aon will soon become the third major insurance broker to amend a settlement agreement with New York regulators in which it was forced to halt use of certain commissions, an official said.
Chicago-based Aon will have a new agreement "shortly," said John Rothblatt, assistant deputy superintendent and counsel for the New York Insurance Department.
He explained that the Aon change has taken longer because their settlement agreement involved the states of Illinois and Connecticut as well.
Brokers were forced to alter their commission arrangements after investigations by regulators turned up evidence that undisclosed contingent commissions were serving as kickbacks to reward steering of clients as part of price fixing by insurers.
On Wednesday, Willis arranged a change in its settlement with New York and prior to that Marsh made such an arrangement.
Mr. Rothblatt explained that the changes do not allow brokers to accept contingent commissions but, "they are now permitted to receive service fees for services they perform on behalf of the insurer."
Before the latest change, all they could accept from insurers was a commission that was disclosed in advance for a specific percentage of premium, he explained.
Mr. Rothblatt noted that the service fees must also be disclosed to customers in advance.
Joe Plumeri, chairman and chief executive officer of Willis, said in a statement after the amendment was signed with the New York Department of insurance and New York Attorney General's Office that, "It is important that we reiterate our absolute commitment to our principles–namely we will always be compensated in a manner that promotes the best interest of our clients."
He added that, "Complete transparency in a conflict-free environment is the minimum standard. So, in our role as broker, we are steadfast in refusing to accept contingents and supplemental compensation. Any enhanced regulatory flexibility that we may be granted will be applied against our unwavering principles."
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