The Property and Casualty Insurers Association of America has issued a statement in response to the investigation by New York Attorney General Eliot Spitzer alleging illegal practices in the commercial lines insurance market. The statement, by PCI President and CEO Ernie Csiszar – who was NAIC president until recently – notes “it is unfair to paint the entire industry with the same brush that is being applied to the individuals and corporations named in the Spitzer complaint.”

Excerpts from the PCI Statement:

“PCI believes that unnecessarily expanding the investigation with the intent of altering long established incentive compensation systems for brokers and agents is counterproductive and may distract law enforcement officials and insurance regulators in other states from their primary objective – identifying, prosecuting, and punishing those guilty of cheating consumers.”

“Incentive compensation programs, including the payment of contingent fees and commissions based on the volume or profitability of business, are a part of the fabric in many industries, including insurance, real estate, and auto dealerships. These agreements not only award sales excellence, they also can result in the consumer being able to enjoy more favorable pricing, terms and conditions.”

“PCI does not believe that these contractual relationships between insurers and agents and brokers should be subject to review by regulators or law enforcement officials, and we believe that it is poor public policy for legislators and regulators to dictate the terms and conditions of contracts between private parties.”

Read the full PCI statement here. (10/22/04)

October 26, 2004