IIABA President Airs Views On Contingents, Disclosure

By Mark E. Ruquet

During a speech at the Independent Insurance Agents &Brokers of America's Legislative Conference and Convention latelast month, IIABA President Alex Soto defended incentivecompensation and profit-sharing arrangements.

“Incentive compensation is proper, is legal, and it is used inevery facet of commerce in the United States rewarding excellence,”he said. “It is part of an American tradition.”

The incentives, he said, help both customers and companiesreduce risk exposures and underwrite those exposures properly, andhelp companies make a profit on underwriting risks.

Mr. Soto went on to say that he had no problem with sharinginformation about his compensation with clients, but felt the driveby some companies to disclose the information was going to theextreme.

He said if companies wish to disclose compensation information,they should also disclose how much of the premium dollar is spenton the carrier's business, including a breakdown of executives'compensation.

“In that context, include in a generic sense what we get paid,”said Mr. Soto. “The fact of the matter is, that's a whole bunch ofhooey,” he said, referring to the entire concept of disclosure.

He said what clients are interested in is the bottom line–cost,the quality of the carrier and the service they receive.

If the customer does not like the result, he continued, they cango to another agent.

“You and I have to be the best we can be every day in order toretain our clients,” he said.

“Incentive compensation is proper, is legal, and it is used inevery facet of commerce in the United States rewarding excellence.It is part of an American tradition.”

Alex Soto, President, IIABA