Marsh refuses contingent commissions in Canadian and U.S. core broking segments

Marsh will no longer accept contingent commissions in its core broking segment in Canada or the United States.
The firm will “continue to provide detailed transactional disclosure to clients in its core brokerage operations, including all quotes received and compensation information,” a release says.
Marsh & McLennan Agency LLC and Marsh Consumer’s affinity, sponsored program and personal lines businesses will accept contingent commissions.
“For these segments, the firm will provide plain language disclosure that meets or exceeds New York’s Regulation No. 194, as well as all other applicable legal and regulatory requirements,” the release adds.
Marsh will continue to collect enhanced commissions and fees for services from insurers with respect to its core broking operations.
“These forms of compensation, which are paid in consideration of Marsh’s provision of specific services to insurers, are fixed in advance of insurance transactions and are not related to volume, retention, growth or profitability.”
The Risk and Insurance Management Society applauds the decision.
“RIMS is pleased that Marsh has joined other large brokers in agreeing not to accept contingent commissions. We call on all brokers to make the same commitment to their customers,” said Terry Fleming, RIMS president.
“Further, we call on the insurance industry to develop alternative forms of compensation that do not place the broker in the position of a conflict of interest in the insurance purchase transaction.”