Aon Settles Investigations by Five Agencies in Three States
04 Marzo 2005 - 4:27PM
PR Newswire (US)
Aon Settles Investigations by Five Agencies in Three States
CHICAGO, March 4 /PRNewswire-FirstCall/ -- Aon Corporation
(NYSE:AOC) has reached a comprehensive agreement with five agencies
in three states to settle investigations relating to contingent
commissions and other business practices that may have created
actual or potential conflicts of interest. (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO ) Parties
involved in the settlement, in which Aon admits no wrongdoing or
liability, include the attorneys general of New York, Illinois and
Connecticut as well as the insurance departments of New York and
Illinois. The settlement involves no fines or penalties. Elements
of the comprehensive agreement include: -- Creation of a $190
million fund to provide compensation to eligible U.S. clients with
policies incepted or renewed between January 1, 2001, and December
31, 2004. -- Commitment to new business practices that include
heightened disclosure of remuneration and the elimination of
practices that may have posed conflicts of interest. --
Establishment of a Compliance Committee of the Aon Board of
Directors. Under the terms of the settlement, Aon will be
contacting U.S. policyholders who may be eligible for payments from
the fund. The size of the payments will be calculated with a
formula approved by other parties to the settlement. Additional
information about the fund will be available on Aon's web site (
http://www.aon.com/ ). Patrick G. Ryan, Aon chairman and chief
executive officer, said, "Aon now has these investigations behind
us and can move forward with renewed focus on our clients. We are
enhancing policies, practices and controls; setting new, higher
standards for service excellence; and re-energizing our commitment
to safeguarding the trust that clients put in our 48,000 people
every day." Mr. Ryan added, "While we do not agree with a number of
allegations in the complaints, the settlement permits us to look to
the future. I believe that the business reforms emerging from these
investigations establish a model that can be - and should be -
embraced by the whole industry. Clients have every right to expect
transactions that are transparent and free of even any appearance
of conflicts of interests." The settlement included a statement by
Mr. Ryan in which he apologized and acknowledged that some Aon
personnel engaged in improper conduct that violated the principles
embodied in Aon's Code of Conduct and Aon Values. However, Aon
reaffirmed its previous statements that its internal review had
found no evidence of price fixing, bid rigging or the solicitation
of fictitious quotes. In addition, there is no evidence of the
antitrust offense of tying, and the complaints did not include such
allegations. Aon has previously announced that it would eliminate
contingent commissions effective after October 1, 2004. The
elimination of contingent commissions was also an element of the
settlement agreement. Aon has established a reserve of $180
million, representing the present value of the $190 million
settlement amount. The settlement will be funded in three
installments. Separately, Aon has established a $40 million reserve
in connection with related litigation matters. The financial impact
of these actions is approximately $0.32 cents per diluted share,
net of the previously booked reserves of $50 million, and will be
recorded in the fourth quarter of 2004. The company has scheduled
an 11 a.m. CST (Friday, March 4) investment community
teleconference to review the settlement and its financial
implications. The teleconference will also be accessible via
webcast through http://www.aon.com/ . About Aon Aon Corporation (
http://www.aon.com/ ) is a leading provider of risk management
services, insurance and reinsurance brokerage, human capital and
management consulting, and specialty insurance underwriting. The
company employs approximately 48,000 professionals in its 500
offices in more than 120 countries. Backed by broad resources,
industry knowledge and technical expertise, Aon professionals help
a wide range of clients develop effective risk management and
workforce productivity solutions. Contacts: Gary Sullivan, Public
Relations, +1 312 381 2467 Al Orendorff, Public Relations, +1 312
381 3153 Craig Streem, Investor Relations, +1 312 381 3983 This
press release contains certain statements relating to future
results, which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from either historical or anticipated results, depending on a
variety of factors. Potential factors that could impact results
include the general economic conditions in different countries
around the world, fluctuations in global equity and fixed income
markets, exchange rates, rating agency actions, resolution of
pending regulatory investigations and related issues, including
those related to compensation arrangements with underwriters,
pension funding, ultimate paid claims may be different from
actuarial estimates and actuarial estimates may change over time,
changes in commercial property and casualty markets and commercial
premium rates, the competitive environment, the actual costs of
resolution of contingent liabilities and other loss contingencies,
and the heightened level of potential errors and omissions
liability arising from placements of complex policies and
sophisticated reinsurance arrangements in an insurance market in
which insurer reserves are under pressure. Further information
concerning the Company and its business, including factors that
potentially could materially affect the Company's financial
results, is contained in the Company's filings with the Securities
and Exchange Commission.
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO
http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT:
Gary Sullivan, Public Relations, +1-312-381-2467, Al Orendorff,
Public Relations, +1-312-381-3153, or Craig Streem, Investor
Relations, +1-312-381-3983, all of Aon Corporation Web site:
http://www.aon.com/
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