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PIA National Encouraged by Remarks Made by NY Attorney General Eliot Spitzer on Contingent Commissions

WASHINGTON, January 31, 2005 - The National Association of Professional Insurance Agents (PIA National) said it is encouraged by comments made today by...
January 31, 2005

WASHINGTON, January 31, 2005  -  The National Association of Professional Insurance Agents (PIA National) said it is encouraged by comments made today by New York Attorney General Eliot Spitzer.

During an appearance at the National Press Club in Washington, D.C., Spitzer declined to endorse an industry-wide ban on contingent commissions in the insurance industry. In response to a question, Spitzer said the way contingent commissions were used by mega-brokers Marsh McLennan and others was wrong and "banning contingent commissions at Marsh was the right thing to do," but added that that "in other parts of the industry, they may be appropriate."

"I don't want to say that they [contingent commissions] should be banned industry wide," Spitzer said in response to a question.

"PIA is encouraged that New York Attorney General Eliot Spitzer made this important distinction," said PIA National executive vice president and CEO Len Brevik. "From the outset of Mr. Spitzer's investigations, PIA has stated that contingency agreements themselves are not the problem, documented abuses of them by corporate entities are."

Spitzer's appearance at the National Press Club came on the day that his office announced the settlement of a suit he brought against Marsh & McLennan Cos., the world's biggest insurance broker. Marsh agreed to pay $850 million to settle charges it conspired with insurers to rig bids. Under the terms of the agreement, the company neither admits nor denies the allegations in the Spitzer complaint. The money will be used to provide refunds to insureds; these clients will be eligible to receive a payment without having to prove fault, harm, or wrongdoing.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. Visit PIA at www.PIANET.com

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