UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 8, 2005
Willis Group Holdings Limited
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(Exact Name of Registrant as Specified in Its Charter)
Bermuda
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(State or Other Jurisdiction of Incorporation)
001-16503 98-0352587
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(Commission File Number) (IRS Employer Identification No.)
c/o Willis Group Limited
Ten Trinity Square
London EC3P 3AX, England
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(Address of Principal Executive Offices)
(44) (20) 7488-8111
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On April 8, 2005, Willis Group Holdings Limited ("Willis"), Willis North America
Inc. and Willis of New York, Inc. (collectively, the "Company") entered into an
Assurance of Discontinuance (the "AOD") with the Attorney General of the State
of New York and the Superintendent of Insurance of the State of New York
(collectively, the "NY State Agencies") to resolve all of the issues related to
investigations conducted by the State Agencies. As part of the AOD, Willis has
agreed to continue a number of practices that Willis had adopted previously.
These include the ban on contingent commissions, which Willis announced in
October 2004, as well as the implementation of a number of practices reflected
in the Willis Client Bill of Rights that Willis issued in July 2004.
The material terms of the AOD are as follows:
1. On or before July 1, 2005, Willis North America will pay $50 million into a
fund (the "Fund") to be distributed to certain eligible policyholder
clients. These payments are in full satisfaction of the Company's
obligations under the AOD and the NY State Agencies have agreed not to
impose any other financial obligation or liability on the Company in
connection with their investigations. No portion of the payments by the
Company is considered a fine or penalty.
2. The Fund, plus interest, will be used to compensate the Company's eligible
policyholder clients according to procedures set out in the AOD. No amount
paid to the Fund will be returned to the Company under any circumstances.
3. On or before July 31, 2005, the Company will calculate, in accordance with
a formula approved by the Attorney General, the amount that each
policyholder client is eligible to receive from the Fund. Clients eligible
to participate in the Fund are those U.S. clients that engaged the Company
to place, renew, consult on or service insurance with inception or renewal
dates between January 1, 2001 through December 31, 2004 (the "Relevant
Period") where such placement, renewal, consultation or servicing resulted
in contingent commissions or overrides recorded by Willis during the
Relevant Period (the "Eligible Policyholders").
4. On or before August 20, 2005, the Company must send a notice to each
Eligible Policyholder setting forth, among other things, the amount it will
be paid from the Fund if it elects to participate (a "Participating
Policyholder"). Participating Policyholders must tender a release of claims
against the Company arising from acts, omissions, transactions or conduct
that are the subject of the investigations by the NY State Agencies.
5. On February 1, 2006, each Participating Policyholder shall receive from the
Fund as much of that Participating Policyholder's aggregate share of the
Fund as possible with the monies then available in the Fund.
6. In the event that an Eligible Policyholder elects not to participate or
otherwise does not respond by December 20, 2005 (a "Non-Participating
Policyholder"), that client's allocated share may be used by the Company to
satisfy any pending or other claims asserted by clients relating to the
matters covered by the AOD. In no event shall a distribution be made from
the Fund to any other client until all Participating Policyholders have
been paid, nor shall total payments to any Non-Participating Policyholder
exceed 80% of that policyholder's original allocated share. If any funds
remain in the Fund as of February 20, 2006 such funds shall be distributed
pro rata to the Participating Policyholders.
7. In no event shall any of the amounts paid into the Fund be used to pay
attorneys' fees.
8. Within 60 days of the date of the AOD, the Company shall commence the
implementation, to the extent not already undertaken, of certain business
reforms, including the following:
o To accept only a specific fee to be paid by the client, a specific
percentage commission on premium to be paid by an insurer set at the
time of purchase, renewal, placement or servicing of an insurance
policy, or a combination of both.
o To fully disclose in plain, unambiguous written language commissions
in either dollars or percentage amounts.
o Not to accept any other valuable compensation or consideration from an
insurer other than as stated above, including contingent compensation
and any compensation or preference in connection with the selection of
insurers from which to solicit bids for clients.
o Not to request or accept from any insurer any false, fictitious or
inflated quote, or quote that does not represent the insurers' best
evaluation at the time of the minimum premium the insurer would
require to bind the insurance coverage sought by the client.
o Not to request or accept from any insurer any promise or commitment
for the use of our services, including reinsurance brokerage, agency
or producing services, conditioned upon any arrangement to provide
preferential treatment for any insurer.
o Not to place, renew or service a client's business through a wholesale
broker unless agreed to by the client after full disclosure of all the
compensation to be received, any interest or contractual agreements we
may have in the wholesale broker, and any alternative to using the
wholesaler broker.
o To fully disclose to each client all quotes received in connection
with coverage of the client's risk with all terms and all commissions
to be received for each quote, and to provide disclosure of and obtain
clients written consent to all compensation arrangements.
o To disclose to each client at the end of each year all compensation
received during the preceding year from any insurer or third party in
connection with the client's policy.
o To implement company-wide written standards of conduct regarding
compensation from insurers consistent with the terms of the AOD and
institute appropriate training of employees, including business
ethics, professional obligations, conflicts of interest, antitrust and
trade practices compliance and record keeping.
o To establish a Compliance Committee of our Board of Directors that
will monitor our compliance with the standards of conduct regarding
compensation.
o To maintain a record of all complaints regarding compensation from any
insurer, and provide such record to the Compliance Committee.
o To file annual reports with Superintendent for five years.
9. The Company shall not, directly or indirectly, seek or accept
indemnification pursuant to any insurance policy with respect to any
amounts payable under the AOD.
The foregoing summary is qualified in its entirety by reference to the AOD.
Also on April 8, 2005, the Willis announced that it had entered into an
Assurance of Discontinuance with the Minnesota Attorney General (the "MN AOD").
Under the MN AOD, Willis North America will make an additional $1 million
payment in a manner directed by the Minnesota Attorney General to clients who
are located, headquartered or have a principle place of business in the State of
Minnesota and that were clients of the Company at any time from January 1, 2001
to December 31, 2004. These payments are in addition to the payments to be made
by the Company under the simultaneously executed national agreement with the New
State Agencies. Willis also agreed to reforms that include additional
disclosures to clients and greater transparency in insurance transactions.
The foregoing summary is qualified in its entirety by reference to the MN AOD.
Item 8.01. Other Events.
A copy of the Press Release announcing the execution of the AOD is attached as
Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.
A copy of the Press Release announcing the execution of the MN AOD is attached
as Exhibit 99.2 to this Report on Form 8-K and is incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release of Willis dated April 8, 2005
99.2 Press Release of Willis dated April 8, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WILLIS GROUP HOLDINGS LIMITED
Date: April 13, 2005 By: /s/ Mary E. Caiazzo
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Name: Mary E. Caiazzo
Title: Assistant General Counsel
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release of Willis dated April 8, 2005
99.2 Press Release of Willis dated April 8, 2005
Exhibit 99.1
Willis Reaches Agreement with New York Attorney General and New York Insurance
Department; USD50 Million Resolution Reached Without AG Bringing Lawsuit
NEW YORK--(BUSINESS WIRE)--April 8, 2005--Willis Group Holdings (NYSE: WSH)
has reached a comprehensive agreement with the New York Attorney General and the
Superintendent of Insurance for New York to resolve issues raised by the
industry-wide investigation into contingent commissions.
Willis is the only insurance broker to resolve these matters with the New
York Attorney General without the commencement of a lawsuit against the company,
and is also the only broker to resolve these matters without being required to
issue an apology.
Joe Plumeri, Chairman and Chief Executive Officer of Willis Group Holdings,
said: "Willis is pleased to have resolved this matter with the New York Attorney
General and the New York Insurance Superintendent, and we welcome the Attorney
General's conclusion that it was not appropriate to file a complaint against our
company based on the findings of his investigation. We also are pleased that the
investigation found no evidence of the practice of bid-rigging or tying.
"We appreciate the comments of Attorney General Spitzer," said Plumeri.
"Willis moved quickly to remedy its problems," said Attorney General
Spitzer. "Its actions will help bring about greater transparency and
accountability in the insurance industry. Willis chairman Joseph Plumeri has
demonstrated admirable leadership in spearheading Willis's response to the
issues raised in our investigation and in implementing reforms at the company."
Plumeri continued, "We believe that the regulatory investigations have been
a catalyst for positive change in the industry. We strongly support the reforms
that the Attorney General has advocated, and we previously had voluntarily
implemented many as part of our Client Bill of Rights. We also were the first
major broker in the industry to end the use of contingents, which we have
abolished on a worldwide basis, and we believe that all insurance brokers and
insurers should relinquish the use of contingent agreements."
The company agreed to an Assurance of Discontinuance (AOD), under which
Willis will create a USD50 million fund, prior to July 1, 2005, to compensate
U.S. clients who retained Willis to place insurance between January 1, 2001 and
December 31, 2004, which resulted in contingent commissions. No portion of the
fund represents a fine or a penalty, and Willis admitted no wrongdoing or
liability.
As part of the AOD, Willis has agreed to continue a number of practices
that Willis had adopted previously. These include the ban on contingent
commissions, which Willis announced in October 2004, as well as the
implementation of a number of practices reflected in the Willis Client Bill of
Rights that Willis issued in July 2004, including:
-- Always acting in the best interest of the client;
-- Fully disclosing all compensation that Willis receives for its
services, which the company has been doing since January 2005;
-- Providing enhanced training for its Associates on their duty of care
to clients, which began in November 2004;
-- Prohibiting Associates from accepting compensation, gifts,
entertainment or trips from insurers, a policy which was formalized in
July 2004; and,
-- Enforcing these principles through rigorous internal controls and
compliance reviews.
Mr. Plumeri added: "The agreement that we are announcing today recognizes
the material differences between Willis' conduct and that of our major
competitors. We intend to continue the commitment to reform and transparency
that distinguishes us in the marketplace."
Today at noon, Eastern Time, Mr. Plumeri will host a conference call to
discuss the agreement. Interested parties may access the conference call by
calling 888-769-8522 (domestic) or +1 210-234-8596 (international) with a
passcode of "Willis." Media and individuals will be in a listen-only mode.
Participants are asked to call in a few minutes prior to the call to register
for the event.
Interested parties may also access the conference call in a listen-only
mode via the Internet. To do so they should go to the "Investor" section of the
company's website and register for the call. A replay of the call will be
available through April 22, 2005, at 11:59 PM Eastern Time by calling
866-350-3607 (domestic) or +1 203-369-0032 (international) with no passcode, or
by accessing the web site.
Willis Group Holdings Limited is a leading global insurance broker,
developing and delivering professional insurance, reinsurance, risk management,
financial and human resource consulting and actuarial services to corporations,
public entities and institutions around the world. With over 300 offices in over
100 countries, its global team of 14,500 Associates serves clients in 180
countries. Willis is publicly traded on the New York Stock Exchange under the
symbol WSH. Additional information on Willis may be found on its web site:
www.willis.com.
CONTACT: Willis Group Holdings Limited
Investors:
Kerry K. Calaiaro, 212-837-0880
Email: calaiaro_ke@willis.com
or
Media:
Dan Prince, 212-837-0806
Email: prince_da@willis.com
Exhibit 99.2
Minnesota Attorney General and Willis Group Holdings Resolve Insurance
Investigation
NEW YORK--(BUSINESS WIRE)--April 8, 2005--Minnesota Attorney General Mike
Hatch and Willis Group Holdings, Ltd. Chairman and CEO Joe Plumeri today
announced an agreement relating to Willis' insurance brokerage practices.
Under the agreement, Willis will make payments to its Minnesota clients of
an additional USD1 million on top of the payments to be made by Willis under a
simultaneously executed national agreement with the New York Attorney General's
Office and the New York Superintendent of Insurance. Willis also agreed to
reforms that include additional disclosures to clients and greater transparency
in insurance transactions.
Joe Plumeri, Chairman and Chief Executive Officer of Willis Group Holdings,
said: "Willis is pleased to have resolved this investigation with Attorney
General Hatch and to put it behind our company. Through his direct, personal
involvement, Attorney General Hatch brought to our attention a number of
concerns, which we have addressed. Willis was the first major broker in the
industry to end the use of contingents. We believe that all insurance brokers
and insurers should relinquish the use of contingent agreements."
"We are pleased to have reached this agreement with Willis. I commend Mr.
Plumeri for coming to Minnesota to discuss these issues with me directly and,
through his hands-on involvement, forging this agreement," said Hatch.
Under the terms of the agreement, Willis will be contacting by letter
Minnesota policyholders who may be eligible for payments.
The agreement between Willis and Minnesota Attorney General Hatch resolves
the issues raised in the Attorney General's March 8, 2005 court filings. Under
the agreement, Willis admits no wrongdoing or liability.
Willis Group Holdings Limited is a leading global insurance broker,
developing and delivering professional insurance, reinsurance, risk management,
financial and human resource consulting and actuarial services to corporations,
public entities and institutions around the world. With over 300 offices in over
100 countries, its global team of 14,500 Associates serves clients in 180
countries. Willis is publicly traded on the New York Stock Exchange under the
symbol WSH. Additional information on Willis may be found on its web site:
www.willis.com.
CONTACT: Willis Group Holdings Limited
Investors:
Kerry K. Calaiaro
+1 212 837-0880
Email: calaiaro_ke@willis.com
or
Media:
Dan Prince
+1 212 837-0806
Email: prince_da@willis.com