Zurich Financial Services said today it will book a $325 millionfirst-quarter charge to cover the cost of settling allegations ofbid-rigging and other broker compensation wrongdoing with 13states.

The company also this morning announced an agreement with NewYork, Connecticut and Illinois state officials that will see it pay$153 million for restitution to excess casualty policyholders aswell as penalties.

In addition, the agreement prohibits Zurich from payingcontingent commissions on excess casualty business in the U.S.through 2008 and establishes a mechanism whereby the company wouldstop paying contingent commissions on other lines of business if 65percent of the U.S. market for a particular line of business is notpaying such commissions.

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