Doing The Time Warp
When I heard that major insurance brokers were being subpoenaed in a probe of their contingency fee arrangements with carriers, I thought I had stumbled into a time machine and awoken in 1998! That was the year you-know-what hit the fan about whether side deals between intermediaries and insurers were influencing the placement of coverage to the detriment of risk managers, who were often oblivious about the existence of such sweeteners.
However, when I realized that New York State Attorney General Eliot Spitzer's office was the one doling out subpoenas, I knew I was very much in the here and now. Mr. Spitzer is the man of the hour when it comes to cleaning up the financial services industry. In his most recent triumph, he was way ahead of the curve in curbing abuses by the mutual fund industry. He collected hundreds of millions of dollars to penalize conflicts of interest and, more significantly, changed the way the major players do business to protect the small investor.
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