Steven Nachman of NYSID is asking Bailey what his basis is for believing that brokers will not fight for claim payment when they receive profit sharing. Bailey's answer seems to be based on theory or perception as opposed to actual experience of someone doing this.
Michael Berlin of the AG's office asks if Bailey can see some kind of middle ground. Bailey says no, even with transparency there's still a conflict.
Kermit Brooks asks for Bailey's view on supplemental compensation. Bailey says it's the same conflict of interest.
Brooks asked why Willis voluntarily decided to be first to forgo contingents when it puts them at a competitive disadvantage. Bailey says it was the right thing to do. Brooks: Has this impacted your results over the years? Has it helped or hurt business? Bailey: It's given them the moral high ground and given them the a better appearance in the marketplace. Brooks: Shouldn't we let the market sort it out? Bailey: It's been years now and it's still happening.
Brooks: Do you draw a distinction between sophisticated insurance buyers and smaller operations? Bailey: That is a fair distinction. Contingents hurt the smaller operations.
Brooks: If brokers don't support their clients, won't that over the long term hurt the broker's reputation and put the broker at a competitve disadvantage? Bailey: Clients don't have access to that information? Berlin: Would it help if buyers had that info? Bailey: Yes, but it would be costly and complicated.
Rob Easton: Do clients care more about transparency or about their bottom-line premium? Bailey: Clients "crave" transparency. Easton: What kind of transparencty would Willis like to see -- how much is too much? Bailey: Can't say, but more than we have today. Easton: If Willis's agreement with the AG didn't require it be transparent, would it still do it? Bailey: Absolutely.
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