Willis Pays $2.6M To Settle Fla. Fee Probe

Willis Group Holdings will pay 14 Florida public entities $2.6 million for collecting brokerage fees while failing to inform those customers that the firm was receiving commission payments from insurers, officials said.

Florida Chief Financial Officer Alex Sink, state Attorney General Bill McCollum and Insurance Commissioner Kevin McCarty announced the settlement today with London-headquartered Willis.

Nina Banister, a spokeswoman for the CFO's office, said Willis voluntarily reached the settlement resolving the state's fee investigation of the brokerage, but an ongoing investigation of undisclosed commissions with other brokers continues. She would provide no further details.

Under the settlement agreement Willis will reimburse 14 school board, county and city government entities approximately $2.6 million, the state officials said. Under the settlement, the broker denies any wrongdoing but agreed to reimburse its clients without any formal action taken by the state agencies, officials said.

The settlement came after a joint investigation by the Attorney General's Antitrust Division and the Department of Financial Services led to allegations that Willis improperly collected undisclosed fees or commissions when it placed various coverages with insurance companies.

A prior investigation by New York State authorities, which led to allegations the company was improperly steering customers, was settled in 2005 for $51 million.

Willis brokered multiple insurance contracts in Florida from 1999 through 2004, and clients included economic development councils, city and county governments, and school boards.

"The settlement reaffirms Willis's commitment to the fully transparent compensation disclosure practices we adopted several years ago," Joe Plumeri, chairman and chief executive officer of Willis, said in an e-mail statement.

"The State of Florida recognized Willis' full cooperation with the investigation and the leadership it has shown in advocating transparent and uniform compensation practices among insurance brokers. We are pleased to have this issue from the past behind us," Mr. Plumeri added.

"Florida's taxpayers deserve complete disclosure when local governments are conducting financial transactions with insurance brokers," said Ms. Sink in a statement.

"Honesty and accountability are of paramount importance in the insurance industry, and the Attorney General's Office will continue working to ensure such characteristics are in place," said Attorney General McCollum.

"This settlement is another step toward ensuring that Florida consumers are fully informed in their insurance transactions," said Mr. McCarty.

A breakdown of how the funds will be distributed is still being worked on, said Ms. Banister.

This settlement follows a Florida settlement with Daytona Beach, Fla.-based Brown & Brown in December of last year for $5.8 million over the same issue.