Florida officials said today they have reached a $4 million settlement with Chicago-based insurance broker Aon Corp. over allegations the firm accepted commissions for commercial insurance transactions without disclosing the arrangements to clients.

Attorney General Bill McCollum, Chief Financial Officer Alex Sink and Insurance Commissioner Kevin McCarty jointly put out an announcement of the agreement.

It calls for Aon to pay $2.6 million to Florida to reimburse affected policyholders. Aon will also pay the state $1.4 million in fees and legal costs to be paid within 10 days of the agreement, which was signed by Aon on May 21.

In the agreement, Aon denies any wrongdoing, "but desires to resolve this investigation to avoid the further expense and burden of protracted investigations and litigations."

"Insurance customers, including government entities, need to know what they are getting for the premiums they are paying," said Attorney General McCollum in a statement. "Consumers deserve transparency and taxpayers deserve to be treated fairly."

The state said the three agencies determined that Aon brokered multiple insurance contracts in Florida from 1998 through 2004. Its clients included several public entities in the state of Florida, including city governments and school boards.

The state said it uncovered evidence that Aon failed to inform clients of all the compensation it received from insurers, primarily contingent commissions.

"Florida is committed to ensuring that insurance transactions are both transparent and fair," said Ms. Sink. "When we determine that an insurance broker is not clearly disclosing the amount and nature of all fees and commissions, we will take decisive action on behalf of Florida consumers."

"Full disclosure in all insurance transactions is a must, and Florida consumers deserve nothing less," said Commissioner McCarty. "My office is committed to protecting Floridians, and this settlement further demonstrates the progress Florida is making toward establishing a national standard for transparency in insurance transactions."

The agreement, which will be in force for a period of 10 years, requires the broker to disclose its fees, compensation and commissions, as it currently does, to clients. When the firm is acting as a managing general agent, it must disclose to the state's policyholder, prospective policyholder or their representatives that Aon is acting as an MGA.

Also as part of the agreement, the state will drop appeals it has before the Appellate Court of Illinois and will not pursue any other civil suits in this matter.

In an e-mail, David P. Prosperi, vice president, global public relations for Aon said: "Aon is pleased to have this investigation behind it, since this is essentially the last vestige of the Spitzer investigations of 2004.

"Since this investigation began, Aon has become the leader in the industry in transparency and compensation reform, and that will continue to be our focus in the future."

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