placement service agreement PSA, MSA

A placement service agreement 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 little or no relation to the profitability of that business. A PSA is also called a market service agreement.

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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.

Summary


Synonyms

Market Service Agreement (MSA)