IIABNY Applauds Liberty Mutual's Court Victory

The Independent Insurance Agents & Brokers of New York Inc. is congratulating Liberty Mutual for its conviction and perseverance in dealing with the legal action taken against it by the New York State Attorney General's office.

According to IIABNY, while other carriers were reaching compromise agreements with the AG's office related to charges of bid rigging and misconduct related to the payment of contingency commissions, Liberty Mutual chose to stand up and fight.

The company's efforts have been rewarded in a New York appeals court decision that ruled that Liberty Mutual—parent company of Peerless Insurance—could not be held responsible for failing to disclose payment of contingent commissions to brokers. The court said that payment of contingent commissions "are not illegal" and that Liberty Mutual was under no obligation to reveal those payments because "no special relationship" existed between the company and its brokers.

The association believes the New York Supreme Court's decision was correct, and IIABNY applauds Liberty Mutual's decision to stand up and fight the Attorney General's attack on a long standing and legitimate method of compensating agents and brokers.

IIABNY added that the agent and broker community owes a debt of gratitude to Liberty Mutual for its conviction in the face of so many other major carriers who chose to settle without a fight and now can no longer pay contingent commissions.