AON is poised to stop taking overriders from its clients in the near future by adopting the code of conduct proposed at the UK Association of Insurance and Risk Managers (AIRMIC) conference in 1999, writes Yvette Essen.
The move is likely to cost Aon “millions of pounds”, according to an inside source, but will improve transparency of its dealings with clients. It is thought overriders apply across virtually all lines of the broker's business.
An overrider is a commission paid to general agents or agency managers, in addition to that given to the soliciting agent or broker. In the past, companies have guaranteed a set amount of business to an insurer or Lloyd's syndicate for an overriding fee.
But Aon will now replace its current guidelines with a “client service charter” to comply with the General Insurance Standards Council (GISC) regulations.
A spokesman for Aon said the new code aimed to “bring transparency to our remuneration from insurers”.
The move to no longer take additional payments made by an insurance company was welcomed by the GISC.
Head of policy Angela Darling said: “By ceasing to take overriders and ensuring that their remuneration is declared, Aon are dealing openly and fairly with their commercial customers. This arrangement also seeks to avoid conflicts of interest by ensuring that Aon's level of remuneration does not influence market selection. All of this is in line with the