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Brands and Labels Endorsement
An endorsement to Property coverage granting permission for the insured to remove labels from damaged goods or mark them as "salvage" as long as the goods are not damaged in the process. By so doing, the insured eliminates any potential damage to the firm's reputation as a result of the insurance company selling the salvaged goods.
Insurance Industry News from ProgramBusiness.comPIA On The Attack
The National Association of Professional Insurance Agents (PIA) has condemned certain actions by three state Attorneys General designed to bring about the end of contingent compensation, terming the effort "an assault on a system of compensation that is legal, honest and a mainstay of the American free enterprise system."
The PIA statement follows this week's announcement that St. Paul Travelers had entered into a settlement with the Attorneys General of New York, Connecticut and Illinois, as well as with the New York State Department of Insurance, resolving issues relating to their industry-wide investigations into producer compensation, insurance placement practices and 'non-traditional' insurance products. St. Paul Travelers did not admit to any violation of federal or state law as part of the settlement. Provisions in the agreement, which follow similar agreements entered into by three other insurers, call for the insurer to discontinue paying contingent commissions on excess casualty coverage through 2008; discontinue paying contingent commissions on any line of business if 65 percent of the U.S. market for that line does not do so or signs an agreement not to do so; and agree to support legislation and regulations to abolish contingent commissions for insurance products or lines.
"Contingent compensation is not the problem, those who abuse the system are the problem," said PIA National Executive Vice President & CEO Len Brevik. "PIA condemns illegal actions such as bid-rigging whenever and wherever they occur. Those who violate the law must be punished. Regrettably, this settlement agreement attempts to paint all producers and carriers with an assumption that everyone in the insurance industry who receives performance-based compensation is violating the law. This is clearly not the case."
Brevik said the Attorneys General participating in these settlement agreements, rather than specifically addressing the alleged abuses they have discovered, are attempting to institute broad changes in the manner in which the American free enterprise system operates by trying to bring about the total elimination of incentive compensation, which is completely legal. He also criticized carriers who sign such agreements, and praised insurers such as Liberty Mutual, which has resisted settling a suit brought by New York Attorney General Eliot Spitzer and called contingency fees appropriate and lawful.
"We question the decision by the Attorneys General to include [in the settlement agreement] a provision that the party signing it agrees 'to support legislation and regulations in the United States to abolish Contingent Compensation for insurance products or lines,'" Brevik said. "The fact that this provision was included indicates that the AGs are exceeding their authority and law in several of the mandates they've imposed in these settlements and their true goal is to bring about a ban on all contingent compensation by first prohibiting it in insurance, and then moving on to similar prohibitions in other commercial sectors."
"We also question the propriety of using the settlement process to effectively compel those who sign agreements to support specific legislation," said Brevik. "In particular, we believe that it is not within the purview of these few Attorneys General to attempt to bring about changes in the law by requiring firms or individuals who enter into such agreements to advocate for legislation and regulation supported by these Attorneys General. These officials should not be using their authority to function as lobbyists. To do so constitutes an abuse of their authority."
Rather than concentrating on those who allegedly committed abuses, language in the settlement agreement lumps "tens of thousands of smaller brokers and independent agents" in with firms that have signed such settlements.
"To cast suspicion by encouraging a perception of guilt by association is patently unfair to the overwhelming majority of MClick for the whole story...