ACE Ltd. (NYSE:ACE) announced that it will take several new steps to monitor and improve its compliance with best underwriting practices, and avoid real or any appearance of conflicts of interest.
— The company has issued new, detailed guidelines relating to the way it works with brokers and submits quotes. These include a requirement that any commissions paid to brokers be reported to policyholders on the declarations page of all commercial policies. (All “contingent commission payments” to brokers were terminated previously.)
— The company will appoint a business practices compliance officer.
— An outside consulting firm is being retained to review and recommend enhancements to the company’s business practice training, compliance and controls.
— Responsibilities of the Chief Ethics Officer, including serving as head of the ACE Ethics Committee, have now been assumed by Peter Mear, the company’s General Counsel.
“These new business practice compliance programs will support and strengthen our companywide commitment to ethical conduct,” said Evan Greenberg, president and CEO of ACE. “Our internal investigation is ongoing, and we will continue to look for further ways to enhance our business culture.”
ACE also has terminated two employees and suspended three others as a result of the ongoing investigation into improper business practices being overseen by the Audit Committee of its Board of Directors.
The terminated employees are Geoffrey Gregory, president, ACE Casualty Risk, and Patricia Abrams, an employee in that business unit. The three suspended employees worked in ACE Casualty Risk on a team within the excess casualty unit that did business principally with Marsh Global Broking.
These personnel decisions reportedly result from past improper actions in the excess casualty unit of ACE Casualty Risk, managerial issues, and/or failure to cooperate with the company’s internal investigation or the Attorney General’s investigation. Abrams has previously pled guilty to a criminal misdemeanor in connection with these actions, according to ACE.
ACE’s investigation, which is continuing, is being conducted by the law firm of Debevoise & Plimpton LLP, under the direction of former U.S. Attorney Mary Jo White. This investigation encompasses facts and practices under review by the Attorney General of the State of New York, who has filed a lawsuit against Marsh & McLennan Companies Inc., charging bid-rigging and restraint of trade.
ACE is one of several companies named as participants, but not defendants, in the suit. ACE is reportedly cooperating fully with the Attorney General’s investigation.
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