Revenues increased 21 percent, or more than $28 million, going from $134.9 million to more than $163 million.

The Daytona Beach, Fla.-based insurance firm's acquisition of Hull would add an operation regarded as one of the top 10 wholesalers in the nation, with approximately $63 million in annualized revenue.

Brown & Brown said, after the acquisition, Hull, which has 20 offices in nine states, will continue to operate under its own name as stand-alone operations at their existing locations.

During Brown & Brown's year-end earnings conference call, Jim W. Henderson, president and chief operating officer of the firm, would not discuss details of the deal, but he did say the transaction would be strictly cash for assets.

Mr. Henderson said the combination of Hull and Brown & Brown's existing wholesale operation will give the firm $125 million in revenue for this niche this year.

J. Hyatt Brown, chairman and chief executive officer, said the firm hopes to complete the deal in early March.

Reporting Brown & Brown's year-end results, the broker announced a 17 percent increase in net profits for both the fourth quarter and 2004. This is the twelfth consecutive year the firm has recorded earnings per share growth of 15 percent or more, it noted.

For the year, net income was up $18.5 million, going from $110.3 million, or $1.60 a share, to $128.8 million, or $1.86 a share in 2004. Revenues rose 17 percent, or $95.9 million, from more than $551 million to $647 million.

Reflecting on the challenges facing the firm in 2005, Mr. Brown said, "It is not going to be an easy year. We do expect a lot of yanking and jerking in the marketplace in terms of pricing, but that is where we always do well.

"We are solidly in the middle market, and that seems to be where change comes about, sometimes a little more rapidly. But if our offices are able to stay in contact with the markets, as we have proven in the past, then we can excel in this kind of marketplace."

On the subject of accepting insurers' contingency fees, Mr. Brown noted that the firm has made disclosures to its customers of those fees for years. He said exact dollar amounts are not always available, but the firm does give some estimate based on percentages of expected commissions and contingent fees.

In the case of a wholesale relationship, clients are told that their account could be placed in house, and that could result in a commission to the firm.

He estimated that anywhere between 65 and 70 percent of the firm's accounts that are placed with a wholesaler are placed outside of Brown & Brown.

"We do not tell our people that you must use our own wholesaler," he said, adding that the primary concern is to keep the business from going elsewhere.

Doug Hudson, a spokesman for Brown & Brown, when asked by National Underwriter about costs to the firm from regulators' investigations of suspected brokerage industry contingency fee abuses said that Brown & Brown has not been subject to intensive inquiry.

"We have been asked for a couple of files, but that's it," he said.

While, both Marsh & McLennan and Aon have reported the expense from dealing with the investigation has cost those firms millions of dollars, Mr. Hudson said the cost for Brown & Brown has been negligible.

The biggest expense related to compliance issues, he said, has been meeting the reporting requirements under Sarbanes-Oxley, which was $1.5 million in 2004.