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Administration November 6, 2004
Insurance Broker Comp Now Draws Spitzer's Gaze
June 11, 2004 (PLANSPONSOR.com) - Three large U.S.
insurance providers revealed Friday that they had been hit
with subpoenas from New York Attorney General Eliot Spitzer
seeking information on broker compensation.
Reported by Fred Schneyer
The latest information demands to Aetna Inc., CIGNA Corp., and MetLife, Inc. are part of the attorney general’s broader investigation into whether fees that insurers pay brokers as an incentive to sell their products pose a conflict of interest .
Late Thursday, theHartfordsaid that it, too, had received a subpoena. The investigation reportedly centers on compensation paid to brokers for exceeding sales goals and keeping down claims costs that may undermine the brokers’ loyalty to their customers, both corporations and consumers, who pay the same brokers fees and commissions to arrange coverage.
Several insurance brokers disclosed in late April that they had received subpoenas from Spitzer, including Marsh and Aon, the two largest in the world, and Willis Group Holdings, according to the NY Times.
It’s the latest in a series of investigative forays for Spitzer’s office which, in addition to the mutual fund trading scandal, has recently initiated investigations of variable annuity practices (see Spitzer Turns Regulatory Gaze on Variable Annuity Products ) health insurance companies (see Spitzer Goes After Health Plans ), and ex-NYSE Chairman Dick Grasso’s compensation package (see Spitzer Slaps Former NYSE Head Grasso with Pay Suit ).