8-KOther Events

Aon plc 8-K Report, Corporate Update (May 6, 2010)

Filed May 6, 2010For Securities:AON

Summary

Aon plc filed an 8-K on May 5, 2010, reporting on the execution of an amended and restated regulatory settlement agreement (Amended NAIC Settlement Agreement) with insurance regulators from various states, effective April 1, 2010. This agreement supersedes a previous settlement from May 2006, notably removing the prohibition against Aon accepting contingent compensation from insurers. The new agreement mandates compensation disclosure that meets at least New York Regulation No. 194 standards and any other applicable state regulations. It also requires Aon to maintain compliance programs, provide employee training, and avoid certain prohibited activities. While this agreement represents a significant step in resolving regulatory matters, Aon remains subject to specific settlement terms with Florida and retains obligations under the original NAIC settlement for states that have not yet adopted the amended agreement, particularly concerning contingent compensation restrictions and business reforms in those specific jurisdictions. The company is continuing discussions with remaining states to obtain their countersignatures.

Key Highlights

  • 1Aon entered into an Amended NAIC Settlement Agreement with state insurance regulators, effective April 1, 2010.
  • 2The new agreement supersedes the Original NAIC Settlement Agreement dated May 3, 2006.
  • 3A key change is the removal of the prohibition on Aon accepting contingent compensation from insurers under the Amended NAIC Settlement Agreement.
  • 4Aon must comply with compensation disclosure requirements, at least meeting New York Regulation No. 194.
  • 5The agreement requires Aon to maintain compliance programs and employee training.
  • 6Aon remains bound by prior settlement agreements with Florida and the original NAIC settlement for non-participating states.
  • 7Discussions are ongoing with insurance regulators in states that have not yet countersigned the Amended NAIC Settlement Agreement.

Frequently Asked Questions

The primary impact is the removal of the restriction that previously prohibited Aon from accepting contingent compensation from insurers, as stipulated in the prior agreement. This allows for potentially new revenue streams or fee structures related to contingent compensation, subject to new disclosure and compliance requirements.

No, the agreement does not resolve all issues. While it addresses regulatory settlements with participating states, Aon is still bound by a separate settlement with Florida and the terms of the Original NAIC Settlement Agreement in states that have not yet signed the amended agreement. These non-participating states still have restrictions on contingent compensation and specific business reforms.

Aon is required to provide compensation disclosures that meet or exceed the requirements of New York Regulation No. 194, as well as any specific statutes, rules, regulations, or guidance issued by the signatory states of the Amended NAIC Settlement Agreement.

As of the filing date, the insurance regulators of Colorado, Connecticut, Iowa, Montana, Oklahoma, Nebraska, Nevada, North Dakota, Utah, Washington, and West Virginia had countersigned the agreement. Additionally, regulators from Alaska and Illinois, who were not part of the original agreement, also countersigned the amended agreement.