NEW ORLEANS (Bloomberg) — Willis Group Holdings Ltd., the world's third-largest insurance broker, rejected a new form of incentive pay from insurers that first-ranked Marsh & McLennan Cos. and No. 2 Aon Corp. have said they're considering.Willis won't take the payments from insurers such as Travelers Cos. because they're too similar to the ones targeted by a 2004 New York State probe into collusion in the insurance industry, London- based Willis said in a statement yesterday.

"The client has to be sure — beyond any doubt whatsoever — that their broker is acting objectively to get the best deal done for the client," Willis said.

Bermuda-registered Willis, which made the announcement as an annual conference of US corporate insurance buyers begins in New Orleans, is the first large broker to say it won't take the payments. The four biggest brokers were forced to give up more than $1 billion in annual revenue from so-called "contingent commissions" after Eliot Spitzer, then New York attorney general, accused Marsh & McLennan in 2004 of accepting payoffs from insurers to the detriment of clients. Willis had previously suggested it was uneasy with the new payment proposal, but didn't rule it out until today.

This year, Travelers and Chubb Corp. started offering new "supplemental" commissions to some brokers and agents. They can be fully disclosed to insurance buyers at the time of purchase because they're set in advance, unlike contingents, which are determined after a sale. Spitzer, now the state's governor, and Richard Blumenthal, the Connecticut attorney general, have endorsed those new fee arrangements.

Michael Cherkasky, the Marsh & McLennan chief executive officer, and Greg Case, CEO of Aon, said in February that they hadn't decided whether to accept the new payments and wanted to make sure they wouldn't present a conflict of interest.

Marsh & McLennan, based in New York, had the most 2005 brokerage revenue, followed by Chicago-based Aon and Willis, according to Business Insurance magazine.