With New York regulators unveiling a new broker compensation disclosure rule promoting greater openness in transactions, the head of Willis Group Holdings said the move is not “true transparency.”

Joseph J. Plumeri

Speaking at an industry event in London, Joseph Plumeri, chairman and chief executive officer of Willis Group Holdings, said the measure does not eliminate the conflicts of interest in accepting contingent commissions, a practice his firm has abolished.

“Simply telling clients that you are taking contingents does not make it okay,” Plumeri said, according to a copy of prepared remarks. “It does not change the fact that you have an incentive to act in the interests of someone other than your client – and that when push comes to shove you might not fight for the best deal in the marketplace or advocate fiercely to recover a claim if you know your compensation from the insurer will suffer. It sounds like transparency, but it can never be true transparency.”

Plumeri added that he is “convinced the only way” to resolve such conflicts is not to take contingent commissions at all.

“We stopped taking them because we want to be paid for the value we provide our clients, not the insurance companies,” he said.

Plumeri cited his firm’s move in October 2004 to refuse contingent commissions from insurance carriers when working for retail clients. The practice was later banned for several large brokers, including Aon, Arthur Gallagher, Marsh & McLennan and Willis, by regulators, including agreements made with then-New York Attorney General Eliot Spitzer.

Last year, Gallagher reached a deal with Illinois regulators to end its contingent commission ban, leading to speculation and media reports that the other firms would also try to free themselves of previous regulatory agreements.

Plumeri made his firm’s future intensions clear.

“We actually took a big step forward to building trust with our clients when contingent commissions were banned for the largest brokers in 2005,” he said. “At Willis, we’ve abolished them, and we’re not going back. We’re a better company for it.”

Calling the insurance industry “one of the least trusted industries globally,” Plumeri added that reinstating contingent commissions would overshadow the role insurers play in rebuilding lives and business after a disaster.

“People aren’t focusing on how we as an industry provide the capital and help pick up the pieces in San Francisco, Northridge, New Orleans, Cumbria and Lower Manhattan,” he said. “Instead, they’re looking at how we are compensated, and they’re not happy, with good reason.”