Connecticut Insurance Commissioner Susan Cogswell has warned independent agents in her state that they should expect to see legislation to restrict or wipe out their contingent commissions.
She said that legislation should be expected in Connecticut because the state’s attorney general is among those behind settlements with several insurers to prohibit contingency pay and dictate how agents and brokers should disclose their pay.
When the anti-contingent commission legislation surfaces, agents will not have the support of some of their own insurance company partners because these insurers have pledged to several states that they would back elimination of contingent commissions, Cogswell added in remarks before the Independent Insurance Agents of Conn.
Considering that even in personal lines, one of the intangible factors in determining the quality of an insurer’s book is the strength of relationships with certain agents, this could prove to have interesting effects on the markets if it comes to pass.