Try as you will to turn a page and move on, some stories just won't go away.
Don Imus, the powerful radio shock jock, learned that recently when his serial racism finally caught up with him. An especially ugly remark, one of many over many years, hit precisely the wrong target: a group of bright, young student-athletes at Rutgers University. The slur stuck to him like glue. At the end of a week's worth of media circus, he was gone, first from NBC, then from CBS--banished, disgraced, his career seemingly over.
Though he seems totally inured to it, the same has been happening to President George W. Bush for some time. There's the unending bad news out of Iraq, of course; the persistent criticism of his vice president for perceived prevarications; and now congressional bipartisan calls for the resignation of Alberto Gonzalez, his hapless attorney general, for alleged incompetence and cronyism. He can't turn those pages either.
The insurance business can surely identify. It can't turn one page in particular and won't, apparently, for a good long time. That would be the continuing saga of the broker compensation-bid rigging scandals bared three years ago by the then crusading New York Attorney General Eliot Spitzer, now the state's governor.
I'd like to write about other, brighter things, really I would. Even other things not so bright. But every week it seems we read headlines that stick to the industry like flypaper.
Here are a few samples out of the trade press since I last wrote on this subject just two months ago:
* "Questions Linger Over Proposed Broker Payments"
* "Spitzer's Can of Worms Wriggles On"
* "We Haven't Seen the Last of the Fee Probe Aftermath"
* "In a Post-Spitzer World, What's the Future of Agent-Broker Comp?"
I and many others have written enough about one side of the equation here. About the inherent corruption of the system Spitzer brought into the full light of day. About the horrible failure of some of the top brokers to act only in their own self-interest, and not in the interest of their clients.
In all fairness, though, there is another side to this story, one that's only being given its due recently, one that sees an indiscriminate attack on all commission arrangements as unwarranted and not at all in the best interests of the companies, the producers and the consumers.
For example, there was last fall's study by the University of Georgia's Robert Hoyt and Florida State's Randy Dumm and James Carson.
"When New York Attorney General Eliot Spitzer announced his lawsuit against Marsh & McLennan in October 2004, it had the unfortunate effect of setting off a firestorm of criticism against the entire incentive compensation system, rather than focusing on the few bad actors allegedly engaged in bid-rigging and false quoting to obtain fees under a narrow compensation practice involving market placement agreements," Independent Insurance Agents & Brokers of America spokesman Cliston Brown commented. "The study confirms that true incentive compensation is, in fact, beneficial to consumers and valuable to the structure and stability of the insurance market."
It's all too clear it will take a long, long time to repair the self-inflicted damage. But the industry does seem to be cautiously putting one foot in front of another to get that job done and to be engaging in an earnest and honest debate on how best to do it.
Will it ever end? Don't hold your breath. It won't happen soon. But hopefully, eventually, it will happen, without further distractions.
TOM SLATTERY, a veteran editor and writer on industry affairs for 40 years, is managing director of Slattery-Esterkamp Communications, of Baldwin, N.Y.
June 1, 2007
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