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Member, Beacon International Group, Ltd.
Around two-thirds of U.K. risk managers polled believe that the use of contingent commissions "always creates a conflict of interest" for brokers, according to a survey of members of the Assn. of Insurance & Risk Managers.
And nearly all--93%--of the 200 risk mangers who responded to the survey said they either want contingent commissions to be banned or subject to investigation by the Financial Services Authority, the survey found.
Contingent commissions, which insurers pay brokers based on the volume or profitability of business they produce, have come under fire in the wake of New York Attorney General Eliot Spitzer's investigation of the practice.
While 99% of respondents consider full disclosure of broker compensation important, only 54% say they are satisfied with the amount of disclosure they receive, the survey notes.
In addition, 13% of brokers said they have changed brokers in the past due to a lack of disclosure, while 49% said they would consider doing so in the future. And 66% said they plan to require more disclosure from their brokers when renewing their coverage.
"The buyers with the biggest muscle are better able to insist upon fairness and transparency, but this should be the automatic right of all insurance buyers," AIRMIC Chairman Andrew Cornish said in a statement.