St. Paul to Stop Paying Contingent Commissions, Conn. AG Says
St. Paul Travelers will stop paying contingent commissions to insurance agents and brokers by the start of 2008, according to a statement by Connecticut Attorney General Richard Blumenthal.
Blumenthal said that St. Paul, one of the largest property casualty insurers, had said in a letter to his office that it would comply with a settlement reached last year with Connecticut, Illinois and New York to ban the practice for certain types of coverage.
Contingent commissions are monies given by insurers to agents who bring in large amounts of business to the insurers. But they also represent a potential conflict of interest, regulators say, because brokers are supposed to be working for the client company, not the insurer.