What’s New: In Brief (January 15, 2009)

The Risk and Insurance Management Society (RIMS) is seeking government intervention to issue new regulations to govern broker compensation.
RIMS has called upon the New York State Attorney General’s Office and the New York Insurance Department to take the initiative.
It reaffirms its position that contingent fees for insurance producers should be prohibited, and that in the absence of prohibition, all compensation arrangements should be fully disclosed to the client in writing,” a RIMS release says.
“The acceptance of such fees in transactions that are made on behalf of the buyer represents an inherent conflict of interest.”
RIMS also says that all sources of compensation, direct or indirect, now or in the future, should be disclosed to the client whether or not it is requested.

The pace of reductions for the U.S. property and casualty composite rate index for Dec. 2008 slowed, possibly signifying the end of the soft market, reports MarketScout.
MarketScout’s barometer showed that the average property and casualty rate decrease was 9% in Dec. 2008.
“According to our calculations, the property and casualty rate index fell below ‘rate adequacy’ in the fourth quarter of 2008,” said Richard Kerr, CEO of MarketScout. “Therefore we believe this signifies the beginning of the end of the current soft market.”
It may take as long as one year for rates to begin increasing, but the “soft market trend has turned,” he added.