Steevo: You are right that ordinary commissions always create a conflict of interest. But contingent commissions create special, particularly difficult, conflict of interest. This is because they create much stronger steering incentives for agents, because the optimal response to them is often for an agent to consolidate all of his or her business with a single carrier. Also, they are much harder to effectively disclose than ordinary commissions, because they don't reflect a fixed number. In any event, though, my view is that insurance agents should be prohibited from referring to themselves as "independent" unless they receive precisely the same, fixed commissions -- with no contingent compensation -- from different carriers offering the same types of coverage.

Mike: My general perspective on "From Good Hands to Boxing Gloves" is that it has some important information but is also told from a very particular point of view. It would be nice if there were objective information in the marketplace so that people could judge for themselves how well different companies pay claims. Leslie: Thanks for the suggestion. In general, the typical homeowners policy provides that "If a mortgagee is named in this policy, any loss payable under Coverage A or B will be paid to the mortgagee and you, as interests appear." My general understanding is that courts interpret this to mean that if the mortgagor/policyholder is in default, then the mortgagee can hold on to the insurance proceeds as security for repayment in addition to the damaged property. If there is surplus once the debt is satisfied, then the mortgagee is supposed to pay the excess to the mortgagor. I have no doubt that you are correct that there is some risk that mortgagees will not do this, though I do not know whether or not this is a common problem.