Chicago-based insurance broker Aon Corp. said that fivegovernment agencies have agreed to allow firms acquired by Aon tocontinue to accept contingent commissions for a limited time.

Aon announced today that the attorneys general of New York,Illinois and Connecticut, and the insurance departments of New Yorkand Illinois have agreed to an amendment that will permit companiesacquired by Aon to continue to accept contingent commissions forthree years following their acquisition by Aon. The five wereparties to the 2005 settlement that bars the acceptance ofcontingent commissions by the firm.

Under the amendment, a company acquired by Aon will be able tocontinue accepting contingent commissions on existing business forthree years while it phases out contingents and comes into linewith Aon's other business reforms.

"This amendment advances the goals of transparency andcompensation reform in the insurance industry--goals that Aonstrongly supports," David Prosperi, vice president of global publicrelations with Aon Corp., said in a statement.

"For the last three years, brokers that have not introduced suchreforms have had an unfair advantage in bidding to acquire otherbrokers, because they could assume a continued stream of contingentcommissions from the acquired company, whereas Aon could not," hesaid. "This had the perverse result of favoring brokers which stillaccept contingents and are not transparent to their clients. Theamendment agreed to today will permit Aon to compete on a morelevel playing field when seeking to acquire smaller brokers."

A source indicated that Marsh and Willis--the other two brokerswho entered into a similar agreement as Aon back in 2005--havesimilar understandings with the government agencies.

The 2005 agreement was the result of allegations made againstthe brokers that they engaged in the steering of insurancecontracts to certain preferred insurers in exchange for lucrativecontingent commissions. None of the brokers admitted any wrongdoingin the agreement.