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Arthur J. Gallagher was also embroiled in the tumult.

As a major part of the settlement deal with multiple state officials, these brokers agreed to a ban on the contingent commissions that went to the heart of the matter. That seemed to lay the controversy to rest.

In June, these same state officials allowed the three largest brokers (Gallagher had already been granted permission) to collect incentive commissions from insurance companies on the existing business they acquire for up to three years.

The Big Three claim the action will level the playing field with competing brokers in making acquisitions, and the officials went for that argument.

Shortly thereafter, in a move bound to raise eyebrows, Willis struck a deal with Hilb Rogal & Hobbs, from which it stands to gain megamillions in contingent commissions.

A spokesman for Aon said competitors have had an unfair advantage in bidding to acquire other brokers because they could assume a continued stream of contingent commissions. "This had the perverse effect of favoring brokers that still accept contingents and are not transparent," he said.

The level-playing-field argument is true enough. Most of the brokers, the Big Three contend, still accept contingencies. Then again, they accepted the ban to arrive at the best deal they could get at the time.

But there's a larger issue here, as there always has been as this scandal unfolded: the shocking compromise of the sacred trust between the (presumably) honest broker and the customer, a mess still in repair. And now this. One has to ask, "Why?"

To the latest development in this story that just won't go away there was no official response from the major agent-broker groups: The Council of Insurance Agents & Brokers, the Independent Insurance Agents & Brokers of America, and the National Association of Professional Insurance Agents.

At the very least, we have to agree (somewhat) with the response of Terri Fleming, the director of external affairs for the Risk and Insurance Management Society Inc., which after long deliberation decided that contingency commissions should be eliminated.

Fleming issued this statement to the press: "We would hope they will phase them out as quickly as they can and utilize transparency and full disclosure in the meantime."

What's bothersome with this hopelessly soft pronouncement is the use of the words "hope" and "as quickly as they can." Wouldn't you think that this could have been expressed more forcefully? After all, this is the group most affected by the shenanigans of the past four years, the nation's largest group of commercial insurance consumers.

Ostensibly, RIMS should have clout here, but once again its leadership disappoints.

If the regulators cave and RIMS reacts in so flabby a fashion, who will stand up and be heard in the face of as monumental and damaging an issue as has challenged the American brokerage system in generations?

One can only hope that this three-year deal won't open the door to further abuse.

THOMAS J. SLATTERY, veteran editor and writer on industry affairs for more than 40 years and also the managing director of Slattery-Esterkamp Communications in Baldwin, N.Y.

September 1, 2008

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