Marsh Bars Special Commissions From Insurers
The broker will disclose all fees to its clients. Others in the industry may have to follow suit.
By Thomas S. Mulligan
Times Staff Writer

October 27, 2004

NEW YORK — Beleaguered insurance broker Marsh & McLennan Cos. unveiled a reform package backed by New York Atty. Gen. Eliot Spitzer on Tuesday that could be a template for an industry under fire.

Marsh said it would end questionable special fees it had been receiving from insurers, give its clients more information about all fees and commissions and create a new oversight unit to keep an eye on its insurance-brokerage operations.

Michael G. Cherkasky, Marsh's new chief executive, said in a telephone interview that the changes, effective Jan. 1, were meant to satisfy not just Spitzer but other regulators around the country, "including a notable regulator in California."

California Insurance Commissioner John Garamendi last week proposed state regulations requiring brokers to disclose all the fees they receive from insurers and to provide customers with the "best available" coverage, under penalty of fines, loss of license or both.