Our clients deserve our finest effort when they engage Marsh to obtain insurance coverage. A key component of this is the placement process — determining appropriate insurers for the types of risk involved and negotiating with those insurers on behalf of our clients to obtain optimal coverage at a competitive price.
Marsh Saldaña is fully committed to the principle of transparency in our insurance transactions. As part of that commitment, we will disclose to our customers in Puerto Rico:
- The roles we perform in the insurance transaction.
- Our interests in and compensation arrangements with insurance companies.
- The details of all quotes and indications of premium we receive from insurance companies for our clients.
Likewise, we will respond to requests for additional information from our clients about our compensation and contractual agreements with insurance companies, which can be requested throuh our contact section.
In addition, we have established a toll-free "Ethics & Compliance" line at 800-381-2105. Please use this number or our contact section to submit any concerns or complaints you may have related to compensation paid or payable to Marsh by insurers or any other third parties.
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 Agreements with Insurers
Marsh has agreements with certain insurers pursuant to which Marsh provides services to them and for which Marsh is compensated to the extent permitted by law and regulation in each country in which Marsh operates. Examples include captive management services, claims administration services, claims management software and associated services, mergers and acquisitions due diligence services, managing general agent and managing general underwriter services and insurance brokerage services regarding insurers’ own insurance programs. Marsh is also party to agreements with insurers that facilitate insurance transactions, including agency agreements, and agreements to operate internet-based insurance placing facilities.
Marsh also routinely enters into various types of agreements with insurers that are ancillary to the insurance broking process, or other services performed on behalf of clients. Examples include confidentiality and nondisclosure agreements for the release of data relating to insurance placements, claims handling and loss control programs, nondisclosure and/or noncompetition agreements relating 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 a producer of insurance, the role of Marsh is to place insurance covers for our customers. We can receive compensation in different ways, including commissions paid by insurance companies and fees paid by customers. Marsh Saldaña can receive compensation from the forms listed below.
A retail commission is paid to Marsh Saldaña by the insurer as a percentage of the premium charged to the insured for the policy. The amount of commission may vary depending on several factors, including the type of insurance product sold and the insurer selected by the client. Retail commission rates can vary from transaction to transaction.
Some clients may agree to pay Marsh a fee for brokerage services for property and public or civil liability (property & casualty), in addition to the retail commission paid by insurance companies.
Insurer Consulting Compensation:
Marsh receives compensation from insurers for providing consulting, data analytics or other services. The services are designed to improve the product offerings available to our clients, assist insurers in identifying new opportunities, and enhance insurers’ operational efficiency. The scope and nature of the services vary by insurer. Marsh Saldaña is compensated for these services through fees.
Compensation for Insurer Administration and Other Services:
Marsh operates certain panels, facilities, quota shares, line slips and other placement arrangements with insurers. Marsh receives separate compensation relating to the administration and management of these arrangements that is in addition to any other fee or commission earned by Marsh.
Other Benefits or Compensation:
Marsh may, from time to time, participate in insurance-company promotional events or employee training and development provided by insurers. Sometimes, Marsh is reimbursed by insurers for its costs related to promotional marketing. Marsh also earns interest on premium accounts, as paid to us by the financial institutions where insurance premiums are held prior to remittance to insurers.
Statement Regarding Altering Compensation
Marsh is prohibited by law in most states from altering the amount of compensation received from the insurer based in whole or in part on the sale of an insurance.*
Puerto Rico’s Insurance Code states the following on the matter:
"26 L.P.R.A. Sec. § 2710. Rebates and Incentives"
(1) No person shall provide as an incentive to buy insurance, or after having underwritten an insurance, or in connection with any insurance transaction in any policy, or shall offer, sell, buy, or offer or promise to buy, sell, give, promise, or allow, to the present or prospective insured nor to any other person, in his behalf, in any manner whatsoever:
(a) Any rebate, discount, abatement, credit or reduction of the premium stipulated in a policy.
(b) Any special favor or advantage in the dividends or other benefits to accrue in a policy.
(c) Any other valuable consideration including money, prizes, goods, wares, merchandise, shares or any other securities issued or to be issued, or any interest therein or rights thereto.
(d) Any incentive such as employment, advisory contract or agreement or similar which offers or promises special profits or returns.
(e) Commissions or compensations on a policy in excess of the maximum commission fixed by the approved rating classification filed for the class, or subdivision, of the corresponding type of insurance, or in excess of the maximum commission fixed by the Commissioner for such type of subdivision, except as provided for in § 949k of this title.
(2) No insured named in a policy, nor any employee or representative thereof, shall receive or accept, directly or indirectly, any such rebate, discount, abatement or reduction of premium, or special favor or advantage or valuable consideration or incentive.
(3) Any person who participates in an unlawful rebate or incentive shall be punished by an administrative fine which shall not exceed ten thousand dollars ($ 10,000) for each violation. In addition, he/she shall pay restitution for the total amount of the rebate, commission or profit and shall revoke, from the beginning, any prerogative, favor, advantage, profit, lucrative employment, position or any other valuable consideration involved, whether for the benefactor or the beneficiary.
(4) None of the provisions in this section shall apply to life 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, nor shall make any life insurance, life annuity, or disability insurance contract or agreement as to such contract other than as is clearly expressed in the contract issued thereon, nor pay, nor allow or give nor offer to pay, allow or give, directly or indirectly, as incentive to such insurance, or annuity, any rebate of premiums payable on the contract, nor any special favor or advantage in the dividends or other benefits thereon, nor any other valuable consideration or incentive whatsoever not stipulated in the contract."
*This disclosure is mandated by New York State Insurance Department Regulation No. 194 (11 NYCRR 30) §30.3(5). We interpret this provision to refer to the various anti-rebating insurance laws throughout the country, such as New York Insurance Law §2324 which prohibits insurance companies, agents and brokers from sharing or rebating commissions as an inducement to making an insurance contract. Marsh makes the above statement based on that interpretation.