"I can't say this is a day of great rejoicing in MMC, but I think it is a day of relief, and it is a day that we will mark as a beginning. We look forward to the future," he said at the conference.

In its settlement with Attorney General Eliot Spitzer's office and the New York State Insurance Department, New York-based MMC will set up a fund from which it will pay clients restitution for contingency fees the company received over a three-year period from 2001 through 2004.

The period involved is when members of the company's Marsh brokerage subsidiary were accused by Mr. Spitzer's office in a civil suit of rigging bids with insurers and steering commercial insurance business their way in exchange for contingency fees that served as kickbacks.

The payments into the fund, to total $850 million, will be made beginning June 1, with a $255 million payment, followed by another $255 million payment in 2006, and a $170 million payment in both 2007 and 2008.

Mr. Cherkasky said the bulk of the payments?$131 million?will go to clients in California, followed by New York with $94 million, Pennsylvania with $58 million, Texas at $55 million, and Illinois at $45 million. The amount depended upon the number of corporate headquarters in the state, he said.

The money will be paid directly to clients. They will be contacted by MMC and will be offered an opt-in or opt-out agreement. Payments out of the pool will be based on the number of participants. Those opting-in would agree not to take any legal action, Mr. Cherkasky explained.

Under the agreement, there will be no fines or other costs paid to the state, or an admission of guilt. There will also be no criminal prosecution, Mr. Cherkasky said.

The agreement also lays out terms for future disclosure to clients and transparency of the brokerage transaction that Mr. Cherkasky said would make MMC a leader in the industry.

MMC issued a letter of apology to the attorney general, which is attached to the online press announcement from the attorney general and Insurance Department offices.

Mr. Cherkasky said the fault was with a handful of employees and not institution.

"What we have said is we have a few people inside of this company who have done things we are ashamed of," he said. "Overwhelmingly, this company is made up of fine individuals who obey the law and our code of conduct. We don't believe, as a corporate entity, we have ever been involved in a pattern of covering-up or pattern of criminality. It is an important legal distinction."

The agreement does not settle any civil litigation or other inquiries by other state attorneys general or insurance regulators. However, Mr. Cherkasky said he was hopeful that the structure of the settlement, that benefits clients, would stop their suits and other regulators from pursuing their own litigation.

"There is a vigorous conversation going on [with attorneys general and regulators across the country]," he said. "We are very, very hopeful that they will see what we have done and take note of it, and we will be able to move forward quickly."

Civil actions continue to mount. Just last week, in U.S. District Court Southern District of New York, Judge Shirley W. Kram ordered the consolidation of a securities fraud class action suit led by state pension funds.

The class members are The Public Employees Retirement System of Ohio, State Teachers Retirement System of Ohio, the Ohio Bureau of Workers' Compensation, and the State of New Jersey?Department of Treasury?Division of Investment. The suit charges MMC inflated its earnings through bid-rigging and other abuses. The plaintiffs claim they lost $100 million when the stock faltered after the abuse was uncovered.

The investment community reacted positively to the news.

Brian Meredith with Banc of American Securities issued a research report calling the settlement agreement "a big positive," reducing strains on the company.

Vinay Saqi with Morgan Stanley said the settlement "is very manageable" for the company and would help the company manage the cash flow. Since there is no fine or penalty involved, he said the amount may be tax deductible.

However, Mr. Saqi warned that other states could still press for settlements of their own. Morgan Stanley estimates the total cost in the end, from other states and civil action, could end up costing the company $2 billion.

Standard & Poor's Rating Services issued a statement saying that it is keeping the company on CreditWatch with negative implications.

The markets reacted positively to the news, with MMC's shares on the New York Stock Exchange rising more than 4 percent, or $1.41 a share, to $32.50 by 4 p.m.