Arthur J. Gallagher & Co., Illinois AG, Insurance Director Reach Agreement

Arthur J. Gallagher & Co. on Wednesday reached a comprehensive agreement with the Illinois Attorney General and the Director of Insurance of Illinois to resolve issues related to industry-wide investigations surrounding contingent commissions. There was no lawsuit involved nor were there any findings of unlawful or deceitful conduct or that any client had been disadvantaged. Gallagher admitted no wrongdoing or liability and is not required to issue an apology.

Specifics of the agreement include:

* Creating a $27 million fund for certain retail clients. No portion of the fund represents a fine or a penalty.
* Eliminating contingent commissions for retail clients (in October 2004, Gallagher voluntarily announced it would not enter into retail
contingent commission agreements beginning Jan. 1, 2005).
* Disclosing compensation for services to retail clients.
* Providing enhanced training for employees in business ethics and
compliance matters.
* Creating a Compliance Committee of the Board of Directors.

J. Patrick Gallagher, Jr., president and CEO, said, “We are pleased to have concluded this matter with both the Illinois Attorney General and the Illinois Director of Insurance and we appreciate their professionalism. Gallagher has been serving our clients for over 77 years, and in 1984 we institutionalized our 25 point “Gallagher Way.” The first tenet states that we are dedicated to providing excellence in risk management services to our clients. These new measures will benefit our clients and we believe all insurance organizations should adopt similar measures.”

Gallagher will host a webcast conference call on Thursday, May 19, 2005 at 9 a.m. CT to review the settlement. To listen, go to http://www.ajg.com .

Topics Illinois A.J. Gallagher