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Insurance Commission Split Is Kickback

Client Alert | 1 min read | 08.02.05

The Court of Federal Claims in Morse Diesel Int'l, Inc. v. U.S. (July 15, 2005) held that Morse Diesel, a construction management company whose parent had a commission-splitting arrangement with its performance bond brokers, violated the Anti-Kickback Act of 1986 because the payments from the brokers back to the parent were not, as the contractor argued, merely discounts, promotional allowances, or rebates, but rather were for the improper purpose of “cementing” the brokers’ exclusive relationship with Morse and its parent. Further, in an expansive reading of the term “prime contractor,” the court found that, even though Morse Diesel was the named prime contractor under several fixed-price contracts, its parent also was a prime contractor within the meaning of the act and the surety bond brokers were “subcontractors,” despite the facts that there was no direct relationship between Morse Diesel and the sureties and Morse Diesel did not receive directly any of the sureties’ payments.

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Client Alert | 7 min read | 09.02.26

OCC and FDIC Redefine “Unsafe or Unsound Practices”: The New Supervisory Framework for Banks

On August 27, 2026, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) jointly issued a final rule that, for the first time, gives the term “unsafe or unsound practice” a binding regulatory definition.[1] With it came a uniform standard for Matters Requiring Attention (MRAs) and revised OCC examination manuals.[2]The Federal Reserve did not join the rulemaking, but has adopted comparable standards through guidance. What that means for holding companies and state-chartered institutions is addressed below.[3] The regulation takes effect November 2, 2026, and the revised OCC examination manuals took effect upon their issuance on August 27....