Risk managers concerned for contingent commissions

European risk managers say they are concerned about the implications of a recent ruling in the US on broker commission transparency. The European Federation of Risk Management Associations (FERMA) said: “The contingent commission discussion in the United States affects us since the major brokers are based there, and we serve the interests of our members even if this goes further than ‘our borders’.” Authorities in the US state of Illinois recently reversed an earlier ban preventing Arthur J Gallagher from accepting contingent commissions from insurers for arranging policies. Other major brokers are expected to also seek a reversal of the ban, which did not generally apply to smaller brokers. FERMA said it is in favour of a voluntary ban by brokers on accepting contingent commissions and for full transparency of compensation payments.