LETTER: New arrangements similar to contingents

To the editor: How can risk managers think there will be transparency with these so-called "supplemental compensation commissions" when an insurer will not disclose how they are calculated because "the information is proprietary"?

Business Insurance's Jan. 8 article, "Insurers Rework Broker Compensation," states that these new arrangements will reward broker performance, which is not defined, but only the naïve would mistake it for anything other than volume and profitability.

Obviously, from a strict legal standpoint, these new arrangements are not "contingency compensation," but there are enough similarities that require diligence and probing inquiry for risk managers to achieve awareness, comfort and that ever-elusive transparency.

Richard M. Inserra

President

Insurance Strategies Ltd.

Ridgefield, Conn.