Coyle Hamilton Willis is to stop accepting controversial contingent commissions from insurers. The company said last night that it was ending the practice in line with a decision taken at the level of the parent company Willis Group Holdings.
Mr Joe Plumeri, the chairman and chief executive of Willis, announced the decision in a conference call with analysts yesterday.
"Our clients don't like contingency agreements ... they want contingencies to end. We intend to respond to that. It's over," he said.
The controversial practice of insurers paying brokers commission based on the amount of clients' business they place with them has come under scrutiny since New York Attorney General Mr Eliot Spitzer sued Marsh & McLennan last week for allegedly rigging quotes in connection with contingency fees.
Marsh Ireland, the Irish subsidiary, refused to comment yesterday on whether it accepted contingent commissions (which are known as override commissions in the Irish market).
A Coyle Hamilton Willis spokesman said the company was "confirming we will be following the policy as set out by Joe Plumeri and instigating it in the Irish market".
Willis said it had thoroughly reviewed its practices and had found no evidence of any bid-rigging or so-called "tying", where brokers demand the right to place reinsurance with the insurers they place business with.
Willis said it would stop its contingency fee agreements in North America immediately and would discontinue its other deals with insurers around the world by the end of the year.
The Irish Insurance Federation (IIF) said yesterday that it was not aware of any instances of contingent commissions being paid. IIF chief executive Mr Michael Kemp said such commissions were not illegal as there were no restrictions on commissions to ensure fair competition.
However, he pointed out that any broker accepting these sorts of commission could be in breach of its obligations under the Irish Financial Services Regulatory Authority (IFSRA) code which requires it to act in the best interest of clients.
