South African global financial and risk services provider Alexander Forbes said on Thursday that it is not involved in an investigation into the business activities of a number of large, United States-based global insurance brokers.
The probe has been expanded from an inquiry into contingent commission agreements with insurance carriers to an active investigation of improper business practices, specifically bid-rigging.
“Alexander Forbes is not involved in the investigation and we have not been subpoenaed in relation to the cases being reported,” the South African group said.
It added that its policy is always to act in the best interests of its clients.
“Bid-rigging is contrary to clients’ best interests and is not tolerated in our business,” it said.
The group said contingent commission agreements with insurers are widely recognised as long-standing industry practices.
“In light of the recent market developments, we have initiated a full review within our United Kingdom and South African insurance-broking businesses to identify all arrangements that could be construed as contingent commissions,” it said.
“To the extent this review reveals any volume- or profit-contingent commission payments to our insurance-broking businesses, we intend to discontinue these arrangements in line with other major global insurance brokers,” it added.
According to the group, the review is scheduled to be completed and the findings released together with the group’s interim results on November 15 this year.
“Alexander Forbes prides itself on its record of maintaining long-term client relationships built on trust and integrity. We will continue to always act in the best interests of our clients,” the group added. — I-Net Bridge