AAMGA Testifies on Appropriateness of Wholesale Insurance Profit Commissions

In response to the New York State Department of Insurance and Attorney General's Office joint hearing on the appropriateness of "contingent commissions," the AAMGA Governmental Affairs Committee Co-Chairs, Bill Malone and Kurt Bingeman, along with Executive Director Bernie Heinze, each offered testimony on the integral nature and operation of the wholesale insurance marketplace, and the propriety of profit commissions. Click here for a copy of the testimony presented.

"Since the wholesaler/MGA does not represent the buyer, and has no direct contact with the insurance buyer, wholesalers and MGAs should be exempt from regulations applicable to independent producers and brokers regarding contingent commissions and the receipt of other valuable consideration. The receipt of contingent commissions by wholesalers does not present a conflict of interest or even the appearance of a conflict of interest because they do not have any relationship with the insurance buyer," Committee Co-Chair Bill Malone stated at the Hearing in New York City. Two other Hearings on the issue were convened in Buffalo and Albany, NY.

The AAMGA is following these developments and will keep members advised as to the outcome of the Hearings, and any proposed regulations that may emanate from them.