Insurers defend actions in light of Comptroller report

TRENTON – Two insurance titans whose actions drew the attention of the state Comptroller’s office during its investigation of the Delaware River Port Authority defended their actions today.

Both Conner Strong and Willis said they had done nothing illegal. Conner Strong is run by South Jersey Democratic power broker George Norcross, and Willis is run by former N.J. Sports and Exposition Authority commissioner Joe Plumeri.

Both agencies pointed out they cooperated with the Comptroller’s office, and the resulting report stated that nothing illegal had been done.

The Comptroller issued a report today that raised questions about expenditures of hundreds of millions of dollars. As a result, the DRPA said it has already complied with recommendations, including elimination of economic development projects that have little to do with the day to day business of operating bridges.

The report shined a light on the two insurance agencies over how the DRPA selected Willis as a broker. The Comptroller’s report said Willis was notified of its selection not by DRPA but by Conner Strong.

In addition, Willis paid $455,000 of its DRPA-originated commissions to Conner Strong and a related insurance broker between 2003 and 2009, the Comptroller stated.

The insurers took issue with some aspects of the report.

Willis said in a release that “While the Report is critical of certain of the DRPA’s past practices, the OSC makes clear that Willis acted legally in providing insurance brokerage services to the DRPA. Indeed, it is common industry practice for licensed insurance brokers to share commissions.

“The Report also concluded that the OSC did not find that the DRPA paid more for insurance brokerage services than the standard rates. As we advised the OSC during their review, Willis supports the use of the competitive bidding process in the selection of insurance brokers for public entities, and, as the Report noted, the DRPA recently selected Willis as one of the DRPA’s insurance brokers based upon Willis’s ‘outstanding’ submission in response to the DRPA’s RFP.”

And Conner Strong issued a detailed explanation of its position and disputed some of the Comptroller’s report.

“Commerce (now known as Conner Strong) respectfully disagrees with the Comptroller’s observation that the DRPA lost the opportunity for savings years ago by negotiating insurance commissions.

“Specifically, New Jersey law and regulations did not, and do not, permit the DRPA to negotiate lower commissions with its insurance brokers. As a result, any payment to Commerce by Willis – regardless of the purpose – had zero impact on the DRPA’s commission rates or amounts. Furthermore, Commerce and Willis had a marketing agreement, not a commission arrangement.”

According to Conner Strong, the relationship between the two companies began when Plumeri joined the board of directors of Commerce Bank in 2003.

Willis and Commerce entered into a marketing agreement two years after Willis became the DRPA New Jersey broker, according to Conner Strong.

“It was not until 2005, at least two years after having been appointed the DRPA’s insurance broker, that Willis first made a marketing agreement payment to Commerce. Even though Willis remains the New Jersey DRPA insurance broker today, Willis has not made a marketing payment to Commerce or its successor companies since 2009,” Conner Strong stated.

Earlier story:

Christie lauds Comptroller’s DRPA report 


Insurers defend actions in light of Comptroller report