ACE Ltd.?s decision to stop paying contingent commissions to insurance brokers has led to a ?constant argument? with brokers that still accept them, according to the chairman of ACE Ltd.

Brian Duperreault, speaking at a conference on business ethics in New York, said the controversy regarding contingent commissions has highlighted the need for reforms of insurance industry business practices, but there is lack of agreement on what changes should be made, Business Insurance reported on its website yesterday.

?The existence of contingent commissions has placed a negative cloud over underwriters and brokers, because every action is seen through the lens of conflicts of interest,? Mr. Duperreault said. ?In general, brokers should not be compensated by insurers, because they don?t work for them. They work with them, but they work for the insured.?

ACE eliminated contingent commissions in the United States in the wake of a scandal this year in which it was revealed that insurers were paying brokers the fees and that some insurers were fixing bids.

Mr. Duperreault told attendees of a conference on business ethics sponsored by the School of Risk Management, Insurance and Actuarial Science at St. John?s University that the decision to stop paying the commissions had not cost ACE any business because the insurer does not have a lot of business coming in from small producers.

?For the industry in general, though, the rules are still clouded in ambiguity, and there is no consensus on how they should change,? BI reported Mr. Duperreault saying.

The website said he cited a recently commissioned and soon-to-be-released study by ACE that questioned about 950 risk managers and brokers in the United States and Europe on a series of reforms being proposed by the company.

The survey questioned whether participants agreed that brokers should be fairly compensated by their clients, not by insurers. Among US risk managers, 79 percent either agreed or strongly agreed with this statement, while 69 percent of their European counterparts felt the same.

However, only 50 percent of US brokers and 33 percent of European brokers agreed or strongly agreed with the statement. In fact, 21 percent of US brokers and 43 percent of European brokers disagreed or strongly disagreed with this statement, which Mr. Duperreault said reflects a fundamental problem.

?You have to have a conflict of interest if you?re paid by someone else,? he said.

The survey also asked whether there should be full and complete disclosure by brokers to their clients of all quotations for insurance along with their recommendations. Among risk managers, 97 percent in the United States and 92 percent in Europe agreed or strongly agreed with the statement. For brokers, 82 percent of those surveyed in both the United States and Europe agreed or strongly agreed with the statement.

The survey also asked whether brokers should be required to set forth ground rules for the insurance placement process before any bids or quotations are solicited from insurers. In the United States, 82 percent of risk managers agreed or strongly agreed with this statement, while 79 percent of their European counterparts did. However, ten percent of US risk managers and 12 percent of European risk managers disagreed or strongly disagreed.

Meanwhile, 74 percent of US brokers agreed or strongly agreed, while 56 percent of European brokers felt the same. Ten percent of US brokers and 17 percent of European brokers disagreed or strongly disagreed with the statement.