The US insurance industry was plunged into fresh controversy after an investigation revealed the extent to which contingent commissions are paid in personal lines insurance.
The findings could lead to a broadening of New York attorney general Eliot Spitzer's investigations in the US. So far Spitzer's investigations have focused on commercial lines insurance.
The study by the Consumer Federation of America found wide spread use of contingent commission arrangements – such as profit share deals - in home and motor insurance. In some case these amounted to as much as 16% of total commission income.
Chubb, Markel, St Paul Travelers and CNA are among a number of insurers named as paying large contingent commissions.
As a proportion of total personal lines commissions received, 14.48% of Chubb's commissions were paid on a contingent basis. For Markel it was 7.57%, St Paul Travelers 9.57%, and CNA 11.47%.
Chubb, Markel and St Paul Travelers declined to comment. CNA was unavailable for comment.
