No contingent commission demanded by biggest clients
US insurance buyers group the Risk and Insurance Management Society (RIMS) wants clients to set tough minimum standards for brokers after US regulators’ watered down broker commission rules, Dow Jones reports.
"If we create a solid front of members that says these are minimum requirements" we will accept, "it will be hard for brokers to say no," said Scott Clark, risk and benefits officer of the Miami-Dade County Public Schools and the secretary of RIMS,
RIMS covers 10,000 professionals involved in risk management for more than 3,500 corporate and government entities.
Critical of regulators
RIMS has criticised regulators for allowing brokers to accept commissions paid by insurers that are based on business volume or profitability – contingent commissions.
The brokers will have to abide by the terms of New York broker compensation disclosure rules, but RIMS believes the rules are inadequate.
Clark said that RIMS wants its members to require their brokers to either provide them full fee disclosure early in the broking process or not allow their broker to take contingent commissions.
Leverage to demand that
Large accounts such as the one he represents "have the leverage in the marketplace to be able to demand that."
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