Posted on 05 Feb 2009
Joe Plumeri, Chairman and CEO of Willis Group Holdings (NYSE: WSH), the global insurance broker, said today he applauds the New York State Insurance Department for proposing a new regulation mandating full transparency in broker compensation, calling the move "a validation" of Willis' long-standing business policies and its fight for greater transparency in the industry.
Over the last several years, Plumeri has been an outspoken public advocate for creating a consistent industry standard that would bring greater transparency to and mandate full disclosure of broker compensation. Plumeri has argued that such a move is necessary to strengthen client confidence and faith in the insurance industry.
"I commend Superintendent of Insurance Eric Dinallo, the New York State Insurance Department, and Attorney General Andrew Cuomo and his Office for taking this important step to protect the interests of insurance buyers," Plumeri said. "Willis has long been committed to upholding the highest standards of integrity in our industry, and since 2004 we have fully and willingly disclosed to our clients the nature and amount of the compensation we receive for placing coverage with carriers. This proposed regulation is a validation of our firmly held position, and we hope it leads to an industry-wide standard that would apply to all brokers, no matter where they do business."
Under the proposed regulation in New York State, insurance brokers will be required to describe for their clients the nature and amount of the compensation the broker receives, along with any business relationships the broker may have with the insurer. Insurance buyers also will have the right to receive information about any other quotes or alternative insurance products the broker considered and the compensation associated with those quotes or alternatives.
The proposed regulation comes after a series of hearings held last summer before representatives of the New York State Superintendent of Insurance and Attorney General to address the subject of insurance broker compensation and disclosure. During the hearings, Don Bailey, CEO of Willis North America (now Willis HRH), called on the industry to end contingent compensation agreements and bring full transparency to the disclosure of broker compensation.
In October 2004, Willis became the first insurance broker to voluntarily commit to ending the practice of accepting contingent commissions. As part of that initiative, Willis established a Client Bill of Rights - a 10-point document emphasizing the company's commitment to client service, transparency and best practices.
Willis Group Holdings Limited 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 400 offices in nearly 120 countries, with a global team of approximately 20,000 Associates serving clients in some 190 countries.