Arthur J. Gallagher & Co. recently reached a comprehensive agreement with Illinois’ attorney general and insurance director 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, the company said in a statement. Gallagher admitted no wrongdoing or liability and is not required to issue an apology.
Specifics of the agreement include: (1) Creating a $27 million fund for certain retail clients. No portion of the fund represents a fine or a penalty. (2) 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. (3) Disclosing compensation for services to retail clients. (5) Providing enhanced training for employees in business ethics and compliance matters. (6) Creating a compliance committee of the board of directors.
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