Summary
Marsh & McLennan Companies, Inc. (MMC) filed an 8-K report detailing Amendment No. 5 to a previously established Settlement Agreement with the Attorney General of the State of New York and the Superintendent of Insurance of the State of New York. This amendment, dated May 16, 2008, and effective June 3, 2008, modifies terms related to the acceptance of contingent compensation by MMC and its acquired entities. The key change allows MMC to continue accepting contingent compensation from insurers on the existing business of an acquired insurance broker or similar entity for up to three years post-acquisition. However, this allowance does not extend to new business generated by the acquired entity after the acquisition date. Furthermore, any acquired company must be brought into compliance with the Settlement Agreement's business reforms within 180 days of the acquisition, with provisions for policy renewals.
Key Highlights
- 1Amendment No. 5 to the 2005 Settlement Agreement has been executed between MMC and New York State authorities.
- 2The amendment permits continued acceptance of contingent compensation on existing business of acquired entities for up to three years.
- 3Contingent compensation is NOT permitted on new business placed by acquired entities after the acquisition date.
- 4Acquired companies must adopt MMC's business reforms within 180 days of acquisition.
- 5Policy renewals may allow for a later compliance date if immediate adoption isn't feasible.
- 6This filing provides an update on MMC's ongoing compliance and operational adjustments related to a significant prior settlement.