Greater Bay Bancorp of Palo Alto, Calif., said Friday that it had received a "request for information" from the Texas Department of Insurance about the business its insurance brokerage subsidiary does in the state.
The $7.1 billion-asset company made the disclosure in an 8-K filing with the Securities and Exchange Commission. It did not specify the information sought but indicated that it has to do with the contingent commissions paid by insurers whose policies the unit sells.
Insurers pay such commissions on the basis of factors including how many of their policies the broker sells. The practice has come under the microscope in recent weeks since New York Attorney General Elliot Spitzer sued Marsh & McLennan Cos. Inc., the world's largest insurance brokerage, claiming it improperly diverted business in exchange for the commissions.
Greater Bay said such commissions made up 10% of the fees and payments that its insurance brokerage subsidiary, ABD Insurance and Financial Services Inc., received in the 12 months through September. The unit does business throughout the country.
The Texas regulator has also requested information from a number of other insurance brokers, Greater Bay said.
