Gallagher settles suit on contingents

Arthur J. Gallagher & Co. on Friday said it will pay nearly $37 million to end charges that it participated in an industrywide contingent commissions scheme. The allegations came as part of a federal multidistrict class action suit in a New Jersey district court, in which plaintiffs said Itasca, Ill.-based Gallagher and several other brokers and insurers breached federal antitrust rules by conspiring to increase premiums for insurers and commissions for brokers. Gallagher did not admit to any wrongdoing, but in a statement said it was opting to "conclude its involvement, rather than prolong what could be a costly and burdensome lawsuit." Under the settlement, which is subject to court approval, Gallagher agreed pay a total of almost $36.9 million, including $28 million to eligible clients that bought retail insurance from 1994 to 2005 and $8.85 million in plaintiffs' attorney fees.

Brazil closer to opening reinsurance market

Brazil may open its reinsurance market to foreign competition after its Senate on Dec. 20 sent a bill to President Luiz Inacio Lula da Silva that would gradually increase competition for IRB-Brasil Resseguros S.A, the government-controlled reinsurer that has held a monopoly for decades. Industry executives said the legislation would encourage development of new insurance products, thus aiding buyers.

MMC agrees to sell Putnam unit: Report

Marsh & McLennan Cos. Inc. has agreed to sell its Putnam Investments subsidiary to Montreal-based Power Corp. of Canada for $3.9 billion, The Wall Street Journal reported Friday. The deal is expected to be announced in early 2007 pending fund-investors' approval, the report said. Calls to MMC and Power Corp. were not returned immediately. Analysts at New York-based Bear, Stearns & Co. Inc. said a straightforward sale of Putnam would be fully taxable and therefore likely negative for MMC shares, but that proceeds could be used for share buybacks and/or debt reduction and could make a buyout of MMC more attractive.

Comp insurer approved in N.Y.

Workers compensation provider Majestic Insurance Co., a unit of CRM Holdings Ltd. of Bermuda, has obtained approval to write business in New York. San Francisco-based Majestic currently writes business in 15 states, largely on the West Coast. The new license will allow parent CRM to offer a wider array of service to brokers in New York, the company said. Separately, CRM announced management changes, including the promotion of Daniel Hickey from co-chief executive officer to CEO of CRM, following the departure of Martin Rakoff, former co-CEO.

Interboro to emerge from rehabilitation

Interboro Mutual Indemnity Insurance Co. of New York, a provider of general liability and workers compensation, among other coverages, is expected to emerge from three years of insolvency, demutualize and restart as a stock company in early 2007 following an influx of capital from an investor group, the New York state insurance department said. Interboro would be the first rehabilitated insurer to demutualize in New York, the department said.

Former XL Re executive dies of cancer Dec. 24

Keith L. Shroyer, former president and chief underwriting officer of XL Re Latin America, died Dec. 24 after a two-year battle with brain cancer, XL Capital Ltd. announced. He was 57. Mr. Shroyer, an American who spoke Portuguese and Spanish fluently, spent his entire 30-year career in reinsurance in Latin American business. He worked at XL Re Latin America from that division's launch in 1997 until his retirement in 2003. He is credited with building a network of regional offices that boosted XL's presence in the area. Before joining XL Re, Mr. Shroyer worked for American Re-Insurance Co. and American International Group Inc. Mr. Shroyer is survived by his wife and four sons.