Willis Group Calls on Insurance Industry to End Practice of Contingent Agreements with Insurance Carriers
Proposes Standards for Making Compensation Agreements for all Brokers Transparent
New York, NY, July 14, 2008 – Don Bailey, CEO of Willis North America, a subsidiary of Willis Group Holdings (NYSE: WSH), the global insurance broker, today appeared in front of representatives of the New York Superintendent of Insurance and Attorney General at a Public Hearing in Buffalo, New York, to address the subject of insurance producer compensation standards and disclosure. Mr. Bailey called for the insurance industry to end contingent compensation agreements. A proposed regulation pertaining to this issue is currently under consideration by the New York State Insurance Department.
“Establishing a standard set of principles for insurance broker compensation and disclosure is critical to improving trust and transparency in the industry,” said Mr. 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.”
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, Mr. 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.”
Mr. Bailey will be participating in a series of hearings held throughout the state in July.
About Willis Group Holdings
Willis Group Holdings Limited (NYSE: WSH) is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 300 offices in some 100 countries, with a global team of approximately 16,000 Associates serving clients in some 190 countries. Additional information on Willis may be found at www.willis.com.
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Editor’s Note: A copy of the full text of Mr. Bailey’s address can be found at: Oral_Testimony_for_July_14_Public_Hearing_final.pdf