Summary
This 8-K filing from ACE Limited (the registrant, which was Chubb Ltd in the prompt but the filing clearly states ACE Limited) on April 27, 2006, reports the resolution of investigations with multiple New York, Illinois, and Connecticut state attorneys general, as well as the New York Department of Insurance. The investigations pertained to accounting, public reporting, and insurance brokerage practices, particularly concerning nontraditional and finite insurance/reinsurance. As part of the settlement, ACE will pay a total of $80 million, comprising $40 million for restitution to excess casualty policyholders and $40 million in fines. Additionally, the company has agreed to implement significant business reforms, including restrictions on contingent commission payments in the U.S. through 2008 and limitations on other lines of business. ACE will also recognize a first-quarter 2006 after-tax charge of approximately $66 million related to these settlements.
Key Highlights
- 1ACE Limited has settled investigations with the New York, Illinois, and Connecticut Attorneys General, and the New York Department of Insurance.
- 2The settlements address issues related to accounting, public reporting, and insurance brokerage practices, specifically concerning nontraditional and finite insurance and reinsurance.
- 3ACE will pay a total of $80 million, with $40 million designated for restitution to excess casualty policyholders and $40 million as fines.
- 4The company has agreed to implement business reforms, including a ban on contingent commissions for excess casualty business in the U.S. through 2008.
- 5ACE will incur an after-tax charge of approximately $66 million in the first quarter of 2006 related to these settlements.
- 6The settlements resolve outstanding investigations but do not include all issues in the ongoing examination of Westchester Fire Insurance Company.