What does Placement Service Agreement mean? Read on to discover the definition & meaning of the term Placement Service Agreement - to help you better understand the language used in insurance policies.
Placement Service Agreement
Also called a market service agreement (MSA), this is an agreement between an insurance intermediary and an insurer that includes a type of contingent commission program based predominately on the volume of business placed with an insurer with little or no relation to the profitability of the business placed with the insurer. This type of payment is considered to present a greater conflict of interest for the insurance intermediary in representing the interests of the policyholder and was the type of agreement that the New York attorney general focused on during his attack on contingent commission practices in 2003 -2005. This approach is viewed quite unfavorably by the risk management and insurance community and is rarely if ever used today, at least by the largest firms.
We hope the you have a better understanding of the meaning of Placement Service Agreement.