Willis appeals for a set of standards for insurance broker compensation to improve trust and transparency
Willis has called on the insurance industry to end contingent commissions,
Don Bailey, CEO of Willis North America, made the appeal when he appeared in front of the New York Superintendent of Insurance and Attorney General at a Public Hearing in Buffalo, New York.
A proposed regulation pertaining to this issue is currently under consideration by the New York State Insurance Department.
“Establishing a standard set of principals for insurance broker compensation and disclosure is critical to improving trust and transparency in the industry,” said Bailey. “Clients of all sizes and complexities need to be absolutely certain that their brokers keep their interests paramount; otherwise, they will question the integrity of the services we provide. For us, that’s not acceptable. We believe client trust is non-negotiable.”
“Clients of all sizes and complexities need to be absolutely certain that their brokers keep their interests paramount.
Don Bailey, CEO of Willis North America
In October 2004, Willis became the first major insurance broker to voluntarily commit to ending the practice of accepting contingent commissions. Over the last several years, Willis Chairman and CEO Joe Plumeri has been an outspoken public advocate of applying a consistent standard for compensation practices and transparency in disclosure in order to strengthen client confidence and faith in the insurance industry.
In calling for an industry-wide end to contingent compensation agreements, Bailey said, “We did away with contingent payments because we believe that brokers should be paid for the quality of service they provide to clients, not for the volume of business guided to a carrier and not for the profitability of a client to a carrier. In this spirit, we are proposing that all broker contingent compensation agreements be abolished throughout the insurance industry; that all broker compensation be made transparent; and, that a level playing field be created where all brokers abide by the same rules.”
Bailey will be participating in a series of hearings held throughout the state in July.