Aon Ltd has abandoned plans to impose set fees on insurers who place risks in London, and will...
Aon Ltd has abandoned plans to impose set fees on insurers who place risks in London, and will instead agree broker fees on a case-by-case basis.
Changes to the broker's business model come in the light of the Spitzer enquiry and spell the end of contingent commissions.
The company originally proposed to charge underwriters a fixed percentage of premiums, set by the broker, on the services it performs for insurers including policy issuance and claims handling.
London market insurers, however, objected to this approach, and Aon and the IUA have therefore worked together on a new model whereby the broker has added three information boxes to its London market slips.
The three boxes, which will appear under the heading of "fee/brokerage," will require brokers to record on the slip:
· Whether the placement is subject to a fee agreed with the insurance buyer.
· The percentage of premium that the retail or wholesale broker will receive as a commission.
· The percentage of premium paid by insurers for services that a London market broker provides when placing business in the subscription market.
