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27.10.2004FERMA STATEMENT - Brokers compensation


The contingent commission issue is not new and various actions have been taken for the last 6 years by Ferma and various European associations to try to bring more transparency.  In some countries codes of good conducts were signed between the brokers’ representatives and the Risk and Insurance Management Associations, members of Ferma.  In spite of this we understand that contingent commissions are still a practice in some markets.

Ferma considers that broker compensation should be transparent, with all sources of compensation fully disclosed.  Any kind of side agreement between brokers and carriers should be released openly.

Without this kind of transparency, it is not possible to build the trust needed between brokers and clients.

Ferma will encourage the European Commission to define compensation disclosure obligations for insurance transactions, considering that any transaction should show clearly the intermediary compensation associated with the transaction.
FERMA - Federation of European Risk Management Associations

Rue de la presse 4 - 1000 Brussels - BELGIUM
Tel: +32 2 227 11 44 - Direct: +32 2 227 11 38
Fax: +32 2 227 11 48

Email: info@ferma-asso.org
Website: www.ferma-asso.org