Fee / Commission Disclosure

To Our Valued Clients:           

In 2005 the New York State Attorney General commenced an investigation of the insurance industry focused on certain practices by a small number of national brokers and insurance companies. The brokers and companies involved were accused of engaging in bid rigging, price fixing, collusive or other anti competitive practices. SKCG was not a target of this investigation and has never engaged in these practices. Our clients are now and always have been our primary concern.

SKCG is compensated for its work in two ways.  First, the majority of our income is derived from fixed standard commissions on business that we write.  We do, in addition, have “contingent-commission agreements” from many of the insurance companies we represent. Under these agreements, which are not prohibited by the New York State Insurance Department or any state or Federal laws, SKCG may receive additional commission based on the total volume and profitability of all business placed by SKCG in that company.

We view these arrangements as a normal and important part of our compensation.  We are not motivated to “steer” business to a particular company because of these arrangements since most of our insurance companies have them. SKCG is paid to do front line underwriting and submit as much quality business as we can to all our companies.  If we are successful in our efforts, not only are we rewarded, but also the companies we represent are encouraged to take more business from us at competitive prices. Our success has, and will in the future, result in significant benefits to all SKCG clients.

The present investigation is apparently focusing on the fraudulent manipulation of these agreements more so than the agreements themselves.  If it should turn out that the legal principles governing contingent commission agreements change in the future, SKCG will, of course, change its practices to comply with any new regulations or laws.

SKCG is known for its high standards of service and professionalism and the trust placed in us by our clients.  We value your business and the relationships that we have formed with you.  Please do not hesitate to contact us about this or any other matters of concern to you.

Thomas R. Kozera, CPCU
President & CEO
SKCG Group, Inc.