EXHIBIT 10.1
AMENDMENT # 4
TO THE ASSURANCE OF DISCONTINUANCE PURSUANT TO EXECUTIVE LAW ss. 00(00) XXXXXXX
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK AND XXXXXX GROUP HOLDINGS LTD,
XXXXXX NORTH AMERICA INC., AND XXXXXX OF NEW YORK, INC. (collectively "WILLIS")
DATED APRIL 7, 2005 (hereinafter, the "Assurance") and
AMENDMENT #3
TO THE STIPULATION ENTERED INTO BY THE NEW YORK INSURANCE DEPARTMENT WITH WILLIS
AND CERTAIN WILLIS AFFILIATES AS SPECIFIED THEREIN (collectively "XXXXXX GROUP")
DATED APRIL 8, 2005 (hereinafter, the "Stipulation")
WHEREAS, the parties recognize that Willis from time to time has
competitive interests in acquiring brokerage companies; and
WHEREAS, the parties recognize that most of these brokerage companies
continue to accept forms of Compensation prohibited by the Assurance; and
WHEREAS, the parties have agreed that permitting Willis to make such
acquisitions will enable Willis to transition the regional and local brokerage
companies from their current Compensation practices to the transparent, clear,
and conflict-free Compensation practices agreed in this Assurance is in the best
interests of insurance consumers; and
WHEREAS, the parties have agreed to amend the Assurance to permit
Willis to phase-out prohibited Compensation from acquired entities over an
orderly and efficient period, consistent with the terms and conditions of this
Agreement;
NOW, THEREFORE, the parties hereby agree that the Assurance shall be
clarified and amended as follows:
1. Paragraph 7 of the Assurance is hereby amended, such that the first and
second sentences shall be amended to read as follows:
"Subject to Paragraph 9.2, in connection with its insurance brokerage,
agency, producing, consulting and other services in placing, renewing,
consulting on or servicing any insurance policy, Willis shall accept
only: a specific fee to be paid by the client; a specific percentage
commission on premium to be paid by the insurer set at the time of
purchase, renewal, placement or servicing of the insurance policy; a
specific fee for service(s) to be paid by the insurer set at the time
of purchase, renewal, placement or servicing of the insurance policy;
or a combination of fee and commission. Willis shall accept no such
commissions or fees unless, before the binding of any such policy, or
provision of any such service: (a) Willis in plain, unambiguous written
language fully discloses such commissions or fees in either dollars or
percentage amounts, and the specific nature of each service for which
fees are to be received; and (b) the U.S. client consents in writing."
2. Paragraph 9 shall be renumbered 9.1.
3. A new Paragraph 9.2 shall be inserted into the Assurance reading:
"Notwithstanding the preceding paragraph, in the event Willis acquires
a controlling share in an insurance brokerage firm, partnership or
company ("acquired company") that currently is not prohibited from
accepting Contingent Compensation, Willis shall not be in violation of
this Assurance if Willis (a) transitions the acquired company so that
the acquired company no longer accepts Contingent Compensation on
business placed on behalf of existing clients no later than three years
after the effective date of the acquisition; (b) prohibits the acquired
company from accepting Contingent Compensation on (i) any business
placed on behalf of existing clients for which the acquired company was
not receiving Contingent Compensation on the effective date of the
acquisition, and (ii) all business placed on behalf of any new clients
produced on and after the effective date of the acquisition; (c)
clearly identifies to the acquired company's existing clients the form
and basis of Compensation accepted by the acquired company during the
transition period, and gets consent from the U.S. client to keep all
Compensation at the first renewal of each policy consistent with the
procedures outlined in Paragraph 14; (d) makes the acquired company
subject to all of the other Business Reforms agreed in the Assurance
within 180 days of the acquisition, or at the later renewal of each
policy if compliance cannot be completed with regard to that policy
within the 180 day period; and (e) informs the New York State Insurance
Department of the status of the implementation of Business Reforms
every 90 days after the acquisition until all existing clients have
renewed or implementation is completed, whichever is sooner. For
purposes of this paragraph, "existing client" is an insurance client of
the acquired company for which an insurance policy or product produced
by the acquired company is in effect on the effective date of the
acquisition; "new client" is any client of the acquired company other
than an existing client. It is the intention of the parties that the
purpose of this Paragraph is to bring any company acquired by Willis
into compliance with the Compensation practices agreed to in this
Assurance in as orderly fashion as possible; nothing in this Paragraph
shall be used or be construed to otherwise circumvent the requirements
of this Assurance."
4. A new Paragraph 9.3 shall be inserted into the Assurance reading:
"If Willis acquires a company, and elects to continue to accept
Contingent Compensation during the transition period in accordance with
Paragraph 9.2 above, then Willis shall modify its website and all other
public pronouncements regarding the Compensation it receives from
insurers to clearly disclose (a) that it accepts Contingent
Compensation with respect to policies of existing clients of acquired
companies during a three-year transition period after the acquisition;
and (b) the names and locations, including branch offices, of those
acquired companies, together with the respective dates that the
transition periods end.
5. Paragraph 14 of the Assurance is hereby amended by adding the following
sentence to the end of the Paragraph:
"To the extent any Contingent Compensation received during the period
permitted by Paragraph 9.2 cannot be defined with certainty prior to
binding, Willis will describe the methods of determining and the best
estimated amount of such compensation in as reasonable detail as
possible and will comply with the remaining requirements of this
Paragraph."
6. Other than as amended above, the Assurance shall remain in full force
and effect.
7. All references in the Stipulation to the Assurance of Discontinuance
shall be deemed to include this Amendment.
8. This Amendment may be executed in counterparts.
WHEREFORE, the following signatures are affixed hereto on this ____ day
of May, 2008.
Honorable Xxxxxx Xxxxx New York State Insurance Department
______________________ By: __________________________
Attorney General Xxxxxx X. Xxxxxx
State of New York Deputy Superintendent & General Counsel
000 Xxxxxxxx, 00xx Xxxxx 00 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Xxxxxx Group Holdings Limited
Xxxxxx North America Inc.
Xxxxxx of New York, Inc. and
for purposes of the Stipulation,
on behalf of the Xxxxxx Group
By: _____________________
Xxxx X. Xxxxxxxx
Group General Counsel
1 World Financial Center
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
