new york (Bloomberg) — Marsh & McLennan Cos., the insurance broker that paid $850 million to end a probe by Eliot Spitzer in 2005, won release from restrictions on commissions criticised as conflicts of interest that hurt consumers.

The broker and its biggest rivals, Aon Corp. and Willis Group Holdings Inc., can again accept contingent commissions, the New York Insurance Department said yesterday. The once-secret payments from insurers had prompted bid-rigging probes from Spitzer, former New York attorney general.

"These are firms who have paid dearly in some cases in terms of a penalty in lost revenue over the last four or five years," said Illinois Insurance Director Michael McRaith, whose office agreed with New York and Connecticut officials to lift the ban.

"You can have a balanced approach which allows for the generation of legitimate revenue and at the same time it gives consumers the information to make the best choice," McRaith said in an interview.

Marsh & McLennan and Chicago-based Aon appealed to officials for redress in 2008 as regulators opened a review. No. 4 broker Arthur J. Gallagher & Co., which won release in July from a ban of its own, has said it expects to make an extra $10 million annually by again accepting contingent payments. Marsh & McLennan said in 2004 that the payments totalled about $845 million a year, or 12 percent of brokerage revenue.

London-based Willis said it won't take contingents.

"It's a conflict of interest," Willis chief executive officer Joseph Plumeri said of the paycomments. "This is another example of abridging trust and we simply won't participate in it," he said in an interview.

Contingent commissions, which insurers pay to entice brokers, vary in amount based on the quantity of coverage brought by a middleman and how profitable the policies turn out to be for carriers. Spitzer, who conducted the probes and imposed the restrictions, called some contingent commissions "classic cartel behaviour".

Marsh & McLennan gained 51 cents, or 2.3 percent, to $22.90 at 9:48 a.m. in New York Stock Exchange composite trading. That compares with a 2004 high of $49.30 before Spitzer sued the company. Aon advanced 46 cents to $40.36 and Willis climbed 47 cents to $28.35.

The repeals for Aon, Marsh & McLennan and Willis "are a whittling away of reforms instituted by Spitzer", Joseph Belth, professor emeritus of insurance at Indiana University, said in an e-mail. "They illustrate how hard it is to accomplish significant and lasting reform in the insurance market for the benefit of insurance consumers."

Spitzer left his post without extending the fee ban to smaller agents, and regulators subsequently came under pressure from the top brokers and buyers of insurance. Aon, Marsh & McLennan and Willis called for common rules to be applied to all middlemen, and insurance customers asked for additional regulation on the smaller agents.

"Regulators have realised that transparency and a level playing field are very important," said David Prosperi, a spokesman for Aon. The broker has no plans to begin taking contingent commissions, he said.

The New York department proposed new rules last year that would have forced brokers to disclose fees from carriers. The watchdog later softened its stance, saying brokers must reveal the compensation only when asked by clients. Plumeri called the revision "disappointing," and an insurance-buyer group asked the regulator to reconsider.

"The final regulation represents a 180-degree shift from previous versions, in terms of its commitment to consumer protection for renewals," the Risk and Insurance Management Society said last week in a statement. Permitting the collection of contingent commissions by all brokers "could give rise to the same conflict-of-interest concerns that the proposed rule was meant to address".

Spitzer negotiated the ban on contingent commissions through settlement agreements with Aon, Marsh & McLennan and Willis. The agreements retired Spitzer's allegations of fraud and anticompetitive practices in the placing of insurance policies. Aon, the biggest broker, agreed to pay $190 million and No. 3 Willis agreed to pay $50 million.