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RIMS Responds to Marsh Position on Contingent Commissions 3/29/2010


NEW YORK (March 29, 2010) — Last week, Marsh, a leading global brokerage firm, issued a statement outlining its approach to market remuneration and contingent commissions in the U.S. The firm has stated that it will refrain from accepting contingent commissions in transactions with U.S. clients served by its core broking operations, but will continue to accept enhanced commissions and fees for services from insurers. Additionally, the Marsh & McLennan Agency LLC and Marsh Consumer’s affinity, sponsored program and personal lines businesses will accept contingent commissions.
“RIMS is pleased that Marsh has joined other large brokers in agreeing not to accept contingent commissions. We call on all brokers to make the same commitment to their customers,” says Terry Fleming, president of RIMS and director, division of risk management for Montgomery County, Maryland. “Further, we call on the insurance industry to develop alternative forms of compensation that do not place the broker in the position of a conflict of interest in the insurance purchase transaction.”

The Risk and Insurance Management Society, Inc. (RIMS) has always maintained the position that contingent commissions should be universally banned and views Marsh’s intentions as a positive step forward with regard to its U.S clients served by its core broking operations. RIMS is pleased by Marsh’s decision to refrain from accepting contingent commissions for services rendered by its core broking operations, as well as its pledge to practice transparency regarding its brokerage compensation.

RIMS maintains that contingent commissions impose an inherent conflict of interest upon the insurance buying transaction, regardless of the nature of the client or the intermediary. Contingent commissions also impact pricing, as fees are passed along to the consumer. RIMS urges Marsh to adopt a global ban on such commissions.  

RIMS recognizes that many of its members regard enhanced commissions and contingent commissions as one in the same. To that end, RIMS acknowledges Marsh’s efforts to collect enhanced commissions on a flat fee, rather than a volume basis, and it encourages Marsh, its carrier partners and its clients to continue having open and frank discourse over the nature of such compensation, how it is collected and disclosed.

RIMS will continue to work closely with all parties on the issues of producer compensation and disclosure.    

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About RIMS

As the preeminent organization dedicated to advancing the practice of risk management, RIMS, the Risk Management Society™, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world. Founded in 1950, RIMS brings networking, professional development and education opportunities to its membership of more than 11,000 risk management professionals located in more than 60 countries. For more information on RIMS, visit


For more information, contact:

Josh Salter, RIMS communications manager, (212) 655-6059 or


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