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TALLAHASSEE, Fla.--Willis Group Holdings Ltd. agreed to reimburse more than a dozen Florida public entity clients $2.6 million to settle concerns of state officials over its compensation practices.
Under terms of the settlement reached with Florida Attorney General Bill McCollum, Chief Financial Officer Alex Smith and Insurance Commissioner Kevin McCarty, Willis also agreed to fully disclose to clients its commissions and to pay $600,000 in attorneys fees and other costs associated with the investigation.
A joint investigation by the Attorney General's antitrust division and the Department of Financial Services led to allegations that Willis improperly collected undisclosed fees or commissions when it placed various coverages with insurers, according to a press release from Mr. McCollum's office. Willis' clients included more than a dozen public entities in the state of Florida, including economic development councils, school boards, and city and county governments.
Willis denied any wrongdoing but agreed to reimburse its clients without any formal action taken by the state agencies.
In April 2005, Willis agreed to pay $50 million in restitution to policyholders to resolve similar concerns over its collection of contingent commissions by then-New York Attorney General Eliot Spitzer and then-New York State Insurance Superintendent Howard Mills. It simultaneously agreed to pay $1 million to settle a similar investigation by Minnesota officials.
Willis ceased collecting contingent commissions in late 2004.
"The settlement reaffirms Willis' commitment to the fully transparent compensation disclosure practices we adopted several years ago," said Joseph Plumeri, chairman and chief executive officer of Willis, in an e-mailed statement. "The State of Florida recognized Willis' full cooperation with the investigation, and the leadership we have shown in advocating transparent and uniform compensation practices among insurance brokers. We are pleased to have this issue from the past behind us."