RIMS calls for regulation of broker commissions

The Risk and Insurance Management Society (RIMS) called for New York State insurance supervisors to start regulating broker compensation and contingent fees.

The organisation of commercial insurance buyers argued that last summer’s hearings arranged by the New York Attorney General and Insurance Department laid the groundwork for the new regulations.

RIMS claimed that contingent fees for intermediaries should be prohibited, and that in the absence of prohibition, all compensation arrangements should be fully disclosed to the client in writing.

“The acceptance of such fees represents an inherent conflict of interest

The acceptance of such fees in transactions that are made on behalf of the buyer represents an inherent conflict of interest, said the association.

RIMS called for all sources of compensation, direct or indirect, now or in the future, to be disclosed to the client whether or not it is requested.

The association said it looked forward to the findings and recommendations of the New York Insurance Department and Attorney General.