One year after New York Attorney General Eliot Spitzer filed suit against Marsh Inc. alleging bid-rigging in the insurance placement process, a new poll has found that almost half of commercial insurance buyers have either made a material change in their current broker relationship or plan to do so in the next 18 months.

This change includes either replacing the broker or re-assigning some portion of their programme to a new broker.

Industry market information provider Advisen polled 540 risk managers at US and Canadian corporations and government entities in October, the one-year anniversary of New York Attorney General Eliot Spitzer?s lawsuit.

While 13 percent of respondents said they had already made a material change, another 15 percent of respondents told pollsters that their firm plans to initiate a selection process to replace their current broker within the next 18 months. A further 18 percent said they were uncertain whether their firm would consider retaining a new broker.

Advisen?s poll also found that buyers are also taking a more proactive role in their insurance programmes. Nearly 40 percent of the risk managers surveyed now independently verify the information provided to them by their broker and are taking a more active role throughout the placement process. About 60 percent of respondents felt that further standardisation in the placement process would improve overall speed and efficiency of insurance transactions.

?The situation seems to be trust, but verify,? said David K. Bradford, editor-in-chief who co-authored the Advisen Briefing on the survey results. ?Risk managers overall feel they have tackled the compensation issue, but clearly regard the placement process as a work in progress and that will have an effect on their relationship with brokers ? and therefore the dynamics of the marketplace ? for some time.?

Overall, surveyors found that risk managers were satisfied with the industry reaction to revelations about compensation practices.

?Many respondents said they knew about and tolerated contingent commissions, and said their firms were not damaged by the allegedly illegal and anti-competitive activities that came to light in the attorney general?s investigation. A number characterised the settlements negotiated with large brokers by Mr. Spitzer and other state attorneys general as ?found money?,? Mr. Bradford said.

On virtually all compensation issues, risk managers overwhelmingly said they were satisfied with the level of disclosure they now receive from their broker with Marsh in particular being singled out for becoming more transparent.

Many buyers of commercial insurance however expressed dissatisfaction towards insurers that allegedly ?pocket? contingent compensation dollars that previously went to brokers. They also were unhappy with mid-tier brokers who continue to collect contingent commissions after larger brokers have been pressured to abandon them.

Nearly 75 percent of respondents to the survey were senior risk mangers with authority for insurance decisions and almost 90 percent of their firms spend upwards of $1 million on insurance annually. Almost 40 percent of the respondents came from firms spending more than $10 million on insurance and other risk financing alternatives.

This is the third survey of risk managers on contingent commission issues conducted by Advisen. A May, 2004 survey in the wake of Mr. Spitzer?s announcement of a probe of insurance broker compensation practices found that two-thirds of risk managers regarded contingent compensation plans as a conflict of interest for a broker, and over 80 percent were less than fully satisfied about the level of disclosure they received from their broker about compensation received from contingent commissions.

A November 2004 survey found risk managers expressing anger over the potential illegal and anti-competitive practices alleged in the suit. Back then, they advocated new transaction models involving greater transparency, however, few called for the end of contingent commissions.

?The sentiments of risk managers on this issue have clearly evolved since we first surveyed the market and it will certainly continue to evolve,? said Mr. Bradford.

?The constant across all of our research in this area in the last 18 months has been a uniform desire for better and more efficiently delivered information which is the ultimate equaliser in the continuous balancing act between risk manager and brokers.?