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Commissions a conflict, say insurance buyers

NEW YORK (Bloomberg) ? More than two-third of companies in a new survey say the fees that their insurance brokers receive from insurers pose a conflict of interest.

The commissions are the subject of a probe by New York State Attorney General Eliot Spitzer. Advisen Ltd., said 69 percent of the 330 companies it surveyed say the fees pose a conflict and 56 percent said the brokers probably haven?t disclosed them in all cases.

The survey of risk managers was done by e-mail and phone between May 13 and 20.

The Washington Legal Foundation, an advocacy group, asked Spitzer in February to investigate the fees on concern they ?compromise the broker?s fiduciary duty to represent the best interests of their clients?. The conflicts may be posed because the brokerages that find insurance for companies accept fees from the insurers that get the business as well as their clients.

The probe became public last month when Aon and its two biggest competitors, Marsh & McLennan Cos. and Willis Group Holdings Ltd., disclosed they?d received subpoenas from Spitzer seeking information on the fees.

Last week, Chubb Corp. became the first major insurer to say it had gotten a subpoena from Spitzer and insurers Hartford Financial Services Group Inc. and Bermuda-based Ace Ltd. have said they?ve been asked by the New York insurance department to preserve documents.