September 1, 2006 by Canadian Underwriter
Willis Group Holdings Ltd. recently reached an agreement with New York Attorney General Eliot Spitzer and New York Superintendent of Insurance Howard Mills that will allow the broker to accept extra profit-based commissions from insurers when it acts as a managing general agent. This new agreement follows a similar agreement recently finalized between Spitzer, Mills and Marsh Inc. Willis’ agreement amends its April 2005 settlement with New York authorities, which stated the broker would cease collecting contingent commissions from insurers. The reason for the original termination of the commissions was in response to the alleged conflict of interest Spitzer said existed for insurance buyers that compensate Willis for its services. “When working as an MGA (managing general agent), we represent the interests of an insurance company, so this change to the (settlement) is consistent with our position of being paid by our client,” Joe Plumeri, Willis’ chairman and chief executive officer, said in a statement.
American International Group, Inc. (AIG) and the newly formed “sidecar” reinsurer Concord Re Ltd and AIG’s subsidiary, Lexington Insurance Company, have entered into a quota share reinsurance agreement covering the U.S. commercial property insurance business written by Lexington. Concord Re was capitalized with US$730 million from equity securities issued by Concord Re’s parent holding company, Concord Re Holdings Ltd, to investment funds managed by J.C. Flowers & Co. LLC and senior secured term loans issued by Concord Re. The net proceeds of Concord Re’s total capitalization, as well as its share of premiums on this business, will be deposited into a trust account to collateralize Concord Re’s obligations to Lexington. Kevin H. Kelley, chairman and chief executive officer of Lexington says as a result of the industry’s losses from last years devastating hurricanes, Lexington saw an opportunity to meet a market demand for additional property insurance capacity without materially changing its own exposure to catastrophe losses.
International Risk Management Institute, Inc. (IRMI) welcomes Millicent Workman, CPCU, CPIW, AU, to the firm as a research analyst. Workman’s primary responsibility will be as the editor of ‘Practical Risk Management.’ Workman has more than 30 years’ experience as a practicing risk manager. She is currently completing her term as president of the CPCU Society. Workman is a past president and treasurer of the Society’s Memphis Chapter, and has served in many other capacities on the national level including regional vice president, director, and chairman of the Society’s Risk Management Review Task Force. Workman is also active with the Risk and Insurance Management Society (RIMS), having chaired various committees and serving as president of the Memphis Chapter; and the Ole Miss Insurance Advisory Council. In recognition for her dedication and service, Business Insurance named Workman “Risk Manager of the Year” in 1992 and one of the “100 Leading Women in Insurance” in 2000.