The Glenn rule beyond the courtroom

Yesterday I wrote about the Glenn rule: process can change how a court weighs a conflict of interest. https://lnkd.in/ebajJ5pS That principle isn’t limited to courtrooms and insurance companies.

The conflicts brokers face don’t require bad intent. They’re usually structural.

Comp that varies by carrier. Overrides or contingent comp. Volume incentives. A preferred carrier list (whether built on service quality, contract terms, economics, or all three).

Even the simple fact that the broker who recommends the solution may benefit if the client renews it.

You can’t always eliminate those incentives.

You can decide whether to build a process around them that holds up when a committee, a CFO, or counsel asks: “Walk me through how you got there.”

For brokers, a survivable process looks like:

1. Usable disclosure: what you’re paid, by whom, and what changes if the client chooses Carrier A vs Carrier B

2. A documented market check: who was contacted, what was requested, what came back, and why options were rejected

3. Decision criteria in writing: cost is a factor, but not the only factor, and the weighting is explicit

4. Engagement with pushback: capture objections from the client or committee and document the response

5. A clean file: something a committee can hand to counsel and say, “This is how we got here.”

One important nuance: even when the broker isn’t an ERISA fiduciary, the committee is. Your work product becomes part of their fiduciary record.

The brokers who can show their work tend to do well with sophisticated buyers. More and more, CFOs, in-house counsel, and HR leaders are asking less “what did you recommend?” and more “how did you get there?”

If you’re advising a benefits committee, here’s the test:

If someone had to reconstruct the recommendation from the file alone, would it read like a neutral process or a preselected outcome?