NEW YORK—The Risk & Insurance Management Society Inc.'s position on brokers' acceptance of contingent commissions from insurers is simple and straightforward: The practice presents an inherent conflict of interest.

In fact, RIMS spelled it out in a position statement issued in October 2009.

“RIMS continues to call for complete transparency and full disclosure by the broker of all revenue streams associated with the placement of insurance products when they are acting on behalf of the buyer,” said RIMS in the position statement. “To do otherwise runs counter to the relationship of trust between brokers and consumers. It has always been RIMS' position that there is an inherent conflict of interest when a broker receives payment from both buyer and seller in a transaction made purportedly on behalf of the buyer.”

That position still applies, said RIMS President Deborah Luthi.

“It has always been our position and continues to be our position that there's a conflict of interest,” said Ms. Luthi, who is also enterprise risk manager for the City and County of San Francisco. “We continue to call for complete transparency and full disclosure by the broker for all revenue streams that are associated with the placement of insurance.”

Ms. Luthi noted that Willis Group Holdings P.L.C. recently announced that it would begin accepting contingent commissions on its benefit business. She said that RIMS was “encouraged” by Willis Chairman and CEO Joe Plumeri's statement that the broker will not accept contingent commissions on property/casualty business, which is of key concern to RIMS members.

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“It appears that they are going to take the same stance to continue to not take contingents, so we are encouraged by that,” she said.

“I have taken the position that is consistent with RIMS' position, which is the same as it has been for many years when this issue first arose,” said John Phelps, director-business solutions at Blue Cross and Blue Shield of Florida Inc. in Jacksonville, Fla., and vp of RIMS.

“Brokers taking contingent fees from companies creates an inherent conflict of interest,” he said. “It's important that risk managers fully understand in a transparent way exactly what revenues a broker is accepting based upon their account.”

Mr. Phelps said he believes in encouraging risk managers to “eliminate perceptions of conflict of interest with all of their dealings with brokers.”