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Brokers release deal specifics
LONDON-Willis Corroon Group P.L.C. said last week that it plans within 12 years to take a majority shareholding in Gras Savoye S.A., France's largest independent French insurance broker.
Earlier this month, Willis announced it would buy a one-third stake in Gras Savoye.
Under the sale agreement, existing shareholders have the right to sell shares to Willis Corroon three years after it completes the acquisition of the initial stake, and if it has not already done so, the London-based broker can exercise options to increase its interest in Gras Savoye to more than 50% after 12 years.
In the initial purchase, Willis Corroon is paying 453 million French francs ($73.6 million) for Gras Savoye shares representing 33.36% of voting rights. Most of the shares are being bought from members of the Gras and Lucas families, which had held a combined 70% of Gras Savoye, though Willis Corroon is also acquiring the entire 10% shareholding held by French insurance company Assurances Generales de France.
Two other French insurers, AXA-UAP and Athena Assurances, each are retaining their 10% shareholdings. Members of the Gras and Lucas families will hold 43.36% after Willis acquires its stake and GS Euro Finance, a Belgian subsidiary of Gras Savoye controlled by the families, will hold 4.9%.
John Reeve, Willis Corroon executive chairman, said taking a stake in Gras Savoye is "a major step in our strategy of achieving leadership positions in chosen market segments." He particularly cited the "combination of Willis Corroon's global expertise in specialty insurance and Gras Savoye's leading position in the French market" as important for brokers to attract and service multinational clients and international clients based in France. Willis also hopes to retain business Gras Savoye now cedes to other intermediaries.
However, the link raises questions about the future of the UNISON brokering network, of which Gras Savoye is a member. Patrick Lucas, chairman of Gras Savoye, said continued UNISON membership is "something to be examined." Willis Corroon, which left UNISON in 1990, says it has no plans to rejoin.
Diocese hit with abuse judgment
DALLAS-The Dallas Catholic Diocese is facing a $119.6 million verdict in the largest sexual abuse judgment of its kind.
A state court jury in Dallas last week leveled the award, which includes $18 million in punitive damages, against the diocese for gross negligence and concealing information related to sexual abuse by former priest Randolph "Rudy" Kos. Mr. Kos faces criminal charges.
The former priest was accused of sexually abusing boys from 1981 to 1992. Under Texas' rule of joint-and-several liability, the diocese will be responsible for the entire award because Mr. Kos is unable to pay the portion assigned to him. The jury ordered Mr. Kos to pay varying amounts in connection with the allegations of each victim.
Windle Turley, a Dallas attorney who represented eight of the 11 plaintiffs, said insurance coverage for the diocese has been "a matter of great dispute and controversy. . .For some victims they say yes; for some they say no."
Mr. Turley said he is unaware of a larger judgment in a clergy sexual abuse case.
In a statement, Bishop Charles Grahmann said it would abide by the final outcome of the case but that the verdict may be appealed. He also said in the statement that the diocese would continue to help with therapy and counseling. Diocese officials were unavailable to comment Friday.
OPIC confirmation progressing
WASHINGTON-Assistant Treasury Secretary George Munoz appears likely to win swift approval as president of the Overseas Private Investment Corp.
"The description of OPIC as 'corporate welfare' is a case of mistaken identity," Mr. Munoz, who President Clinton nominated a few weeks ago to take OPIC's helm, said in testimony before the Senate Foreign Relations Committee last week.
OPIC, which writes up to $200 million in political risk insurance for U.S. companies doing business in selected developing nations, has been attacked from both ends of the political spectrum as an example of a government handout to corporations. Mr. Munoz emphasized that OPIC does not compete with private insurers but rather "fills a void" by providing long-term coverage the private market will not underwrite.
Sen. Chuck Hagel, R-Neb., who chaired the confirmation hearing, agreed with Mr. Munoz about OPIC's value and promised that "we intend to move very quickly" to confirm Mr. Munoz as head of OPIC.
Mr. Munoz would replace Ruth Harkin, who resigned earlier this year.
Sen. Hagel also said he will hold hearings on OPIC's operations later this year.
The Bermuda liquidators of Electric Mutual Liability Insurance Co. have commuted EMLICO's reinsurance agreements with General Reinsurance Corp. and two General Re affiliates. Terms of the deal were not disclosed. General Re, one of four reinsurers that originally sued Massachusetts regulators over EMLICO's 1995 move to Bermuda, will withdraw from EMLICO-related litigation in Massachusetts and elsewhere
. . . .A New York federal judge earlier this month dismissed a discrimination lawsuit against Morgan Stanley & Co. Inc. that stemmed from racist jokes sent via company e-mail. The judge is allowing the plaintiffs to file an amended complaint, and Howard E. Shafran, the plaintiff's attorney, confirmed he plans to do so. . . .Carolyn L. Murphy, 52, senior vp of CNA Insurance Cos. and president of its commercial operations, is retiring from the company effective Oct. 1. At that time, CNA's commercial operations will be split into two operating departments: CNA Risk Management, headed by Peter P. Conway; and CNA Commercial Insurance, headed by Michael S. McGavick.