Our clients deserve our best efforts when they come to Marsh for insurance coverage. A key component of this is the placement process - determine the appropriate insurers for the types of risks involved and negotiating with those insurers on behalf of our clients to obtain the optimal coverage at a competitive price.
Marsh Saldaña is fully committed to the principle of transparency in our insurance transactions. As part of this commitment, we will disclose to our clients in Puerto Rico:
- Our role in the insurance transaction.
- Our interests in and our compensation agreements with insurance companies.
- The details of all quotations and premium indications that we receive from insurance companies for our clients.
We will also respond to requests for additional information from our clients regarding our compensation and contractual agreements with insurance companies, which can be request through the contact button.
Additionally, we have established an "Ethics and Compliance" line where you can raise any concerns or complaints you may have regarding compensation paid or payable to Marsh, by insurers or any other third party. To report this Ethics or Compliance hotline, please use the toll-free number 800-381-2105 or follow the link below to request a report via the contact button.
Available here is information for clients and prospective clients regarding (1) the participation of Marsh & McLennan Companies, Inc. and its subsidiaries in the ownership of insurers; and (2) the contractual arrangements between Marsh & McLennan Companies, Inc. and its subsidiaries, on the one hand, and insurance companies and distributors (wholesalers), on the other hand .
Contractual Arrangements with Insurers
Marsh may have agreements with certain insurers under which Marsh provides services to them and receives compensation as permitted under the laws or regulations of each country in which Marsh operates. Examples include captive insurance management services, claims management services, claims software management services and associated services, merger and acquisition due diligence services, consulting services, general agency and general underwriting management services, and insurance brokerage services for insurers' insurance programs. Marsh is also party to agreements with insurers that facilitate insurance transactions, including contracts to manage facilities, and contracts to operate insurance placement websites.
Marsh also routinely enters into various types of agreements with insurers to supplement the insurance brokerage process or other services performed on behalf of clients. Examples include confidentiality and non-disclosure agreements for the delivery of data related to insurance placement, claims handling and loss management programs, non-disclosure and/or non-competition agreements related to the development and disclosure of new insurance products and services, and licensing agreements governing access to and use of data management systems and databases.
As an insurance producer, Marsh's role is to place insurance coverage for our clients. We can receive compensation in a number of ways, including commissions paid by insurance companies and fees paid by clients. Marsh Saldaña can receive compensation in the forms listed below.
The insurer pays a Retail Commission to Marsh Saldaña, which is a percentage of the premium paid by the client for the policy. The amount of the commission may vary depending on a number of factors, including the type of insurance product sold and the insurer the client selects. The percentage of retail commissions may vary from one transaction to another.
Some clients may agree to pay Marsh a fee for services, in addition to brokerage commissions paid by the insurers. The fee may be collected in whole or in part through the accreditation of brokerage fees received by Marsh Saldaña for services rendered to the client.
Insurer Consulting Compensation
Marsh Saldaña can receive compensation from insurers for providing consulting, data analysis and other services. These services are designed to improve the product offerings available to our clients, assist insurers in identifying new opportunities, and improve insurers' operational efficiency. The scope and nature of services vary by insurer and geography. In the United States, Canada and Bermuda, this compensation can be paid in the form of a fixed fee, a percentage of premium or a combination of both. Marsh Saldaña is compensated for these services through fees.
Compensation for Insurer Administration and Other Services:
Marsh Saldaña may operate certain facilities or portfolio solutions, and other placement or management agreements with insurers. Therefore, Marsh Saldaña receives a separate compensation related to the creation, administration and management of these agreements, which is added to any other fee or commission received by Marsh.
Other Benefits or Sources of Remuneration:
Marsh Saldaña may, from time to time, participate in promotional events of insurance companies or in training and development of employees by insurance companies. Sometimes insurers reimburse Marsh Saldaña for its promotional marketing costs. Marsh Saldaña earns interest income on its bank accounts paid by financial institutions where premiums are paid before being remitted to the insurers.
Statement Regarding Alteration of Compensation
Marsh is prohibited by law in most states from altering the amount of compensation received from insurers based on all or part of the sale of any insurance*.
The Insurance Code of Puerto Rico states the following about this matter:
"26 L.P.R.A. Sec. § 2710. Rebates and incentives"
(1) No person shall provide in a policy, or offer, sell, buy, or offer or promise to buy, sell, give, promise or grant in any manner to the present or future insured or to any other person, as an inducement to obtain insurance, or after an insurance transaction has been effected, or in connection with an insurance transaction:
(a) No reduction, discount, diminution, credit or reduction in premium provided for in a policy.
(b) Any special favor or advantage in dividends or other benefits to be accrued on the policy.
(c) Any object of value including money, prizes, articles, effects, merchandise, shares or other securities issued or to be issued, or any interest or right over them.
(d) Any inducements such as employment, advisory or other similar contract or agreement that offers or promises special benefits or returns.
(e) Commissions or compensation on a policy in excess of the maximum set by the approved rate file for the applicable class or subdivision of class of insurance, or in excess of the maximum commission or compensation set by the Commissioner for such class or subdivision of class of insurance, except as provided in section 949k of this title.
(2) No insured person named in a policy, nor any employee or representative thereof, shall receive or accept, directly or indirectly, any such discount, reduction or diminution of premium, special favor or advantage, or object of value or incentive.
(3) Any person who participates in an illegal discount or incentive shall be punished by an administrative fine not exceeding ten thousand dollars ($10,000) for each violation. In addition, he or she shall repay the amount of the rebate, commission, or benefit and shall cause the revocation, from the outset, of any prerogative, favor, advantage, benefit, gainful employment, position, or other object of value involved, for both the donor and the recipient.
(4) Nothing in this section shall apply to life insurance or disability insurance. Except as expressly provided by law, no insurer, employee, representative, general agent, producer, authorized representative, or solicitor shall permit or offer to make, or make, any contract of life insurance, annuity, or disability insurance, or any agreement regarding such contract other than as clearly stated in the contract granted for such purpose, nor shall it pay, grant or give, or offer to pay, grant or give, directly or indirectly, as an incentive for such insurance or annuity, any reduction in premiums payable under the contract, or any special favor or advantage in dividends or other benefits thereon, or any other object of value or incentive not provided for in the contract. ”
*This disclosure is required under Regulation No. 194 (11 NYCRR 30) §30.3 (5) of the New York State Department of Insurance. We interpret this regulation to refer to the various anti-rebate insurance laws of the United States, such as New York Insurance Law §2324 which prohibits insurance companies, agents and producers from sharing or reimbursing commissions to induce insurance. Marsh makes the above statement based on this interpretation.