Risk managers need to take control of compensation issue: RIMS president

Risk managers need to take the reigns and address their own concerns regarding broker compensation,the new president of the Risk & Insurance Management Society (RIMS) told members Tuesday.As part of the keynote panel discussion at RIMS’ annual conference in Philadelphia, new president Ellen Vinck challenged risk managers not to leave the solutions to the broker compensation controversy to brokers or regulators. She points to recent media surveys which show a signficant number of risk managers do not know how they are going to respond to the controversy, including whether they will remain with their current intermediary or not. “Don’t sit back, don’t be quiet anymore.” She admonished the profession for not taking action following RIMS guidance on compensation disclosure in the late 1990s, noting that even today too many risk managers are not demanding brokers be accountable for their compensation. “RIMS can’t do this for you. You are the risk managers, the insurance professionals, the insurance buyers, the clients. You need to know what you are going to do.”Vinck called for an end to controversial contingent commissions. “There is not one service model…but I do believe there should be one model for compensation.” This means “the brokers get paid from one source and that should be us, your clients. We want to make sure our interests are put first.”She expresses dismay over the lack of dialogue taking place with insurers. “What are the carriers thinking?” she asks. “Their silence has been defeaning.”Vinck warns if risk managers, broker and insurers do not find some consensus on the issue soon, regulators will step in and fill the void. “We need to be working on this now so we don’t get something we can’t live with in the future.”