Aon Corp. said it will again accept contingent commissions, a type of insurance-broker fee that was at the center of a major investigation and that resulted in billions of dollars in restitution.
“We have conducted a great deal of research around broker compensation across the globe with a focus on serving the needs of our clients and competing on a level playing field in the marketplace,” said Steve McGill, chairman and CEO of Aon Risk Solutions.
“As a result, we have decided to accept various forms of compensation available, which may include supplemental and/or contingent commissions in the geographies and client segments globally where appropriate and legally permissible,” McGill said.
The so-called bonus fees were paid by insurers to brokers based on the volume of business that broker did, or its profitability. A five-year ban on the commissions in several states, including Connecticut, was lifted earlier this year.
Attorney General Richard Blumenthal said, “Aon Corporation, while permitted to accept contingent commissions as of Feb. 11, is legally obligated under its agreement with Connecticut to fully disclose such payments to consumers — prior to purchase.”
In 2005, Aon paid $190 million to settle lawsuits brought by attorneys general in Connecticut, New York and Illinois. It was just one of many settlements from about a dozen lawsuits targeting brokers and insurers which resulted in almost $3 billion in restitution plus $275 million in penalties.
Blumenthal said, “My office will continue to monitor the insurance market to ensure that there is full and prompt disclosure of contingent commissions.”
By Matthew Sturdevant, The Hartford Courant, Conn.
