Zurich American Insurance (ZA) will pay $172 million in a multi-state settlement of charges regarding "contingent commissions" paid to agents and brokers. Multiple states will participate in the funds. The deal follows a similar one recently reached with insurance broker giant Marsh & McLennan.
Although ZA admits to no wrongdoing, it commits to commission disclosure standards, a compliance program and continuing cooperation with state attorneys general and insurance authorities. Insurance Commissioner John Garamendi Announces Landmark Settlement with Zurich American Insurance Co. to End Practice of Paying Secret Commissions (March 20, 2006)
The text of the settlement is available here.
A November 2004 backgrounder on Broker/Agent Compensation is available at the Insurance Information Institute, including an analysis of a Consumer Federation of America Report on Contingent Commissions.
Posted by dougsimpson at March 22, 2006 06:24 AM