Firms bought by the broker will have three years to apply rules
Aon has said that the five government agencies in its 2005 regulatory settlement have agreed to an amendment on companies acquired by Aon.
Those companies will continue to accept contingent commissions for three years following their acquisition by Aon.
Under the amendment, a company acquired by Aon will be able to continue accepting contingent commissions on existing business for three years while it phases out contingents and comes into line with Aon's other business reforms. The government parties to Aon's 2005 settlement agreement are the attorneys general of New York, Illinois and Connecticut, and the insurance departments of New York and Illinois.
"This amendment advances the goals of transparency and compensation reform in the insurance industry, goals that Aon strongly supports," said David Prosperi, vice president of global public relations with Aon Corporation.
"For the last three years, brokers that have not introduced such reforms have had an unfair advantage in bidding to acquire other brokers, because they could assume a continued stream of contingent commissions from the acquired company, whereas Aon could not. This had the perverse result of favoring brokers which still accept contingents and are not transparent to their clients. The amendment agreed to today will permit Aon to compete on a more level playing field when seeking to acquire smaller brokers."