Exhibit 10.1

 

An Agreement Between the Attorney General of the State of Connecticut and

the Insurance Commissioner of the State of Connecticut and

Hilb Rogal & Hobbs Company and its subsidiaries and affiliates

 

WHEREAS, the Attorney General of the State of Connecticut (the “Attorney
General”) has conducted an investigation into certain insurance brokerage and
insurance agency practices (the “Attorney General’s Investigation”) of Hilb
Rogal & Hobbs Company and its subsidiaries and affiliates (“HRH”);

 

WHEREAS, the Attorney General has commenced an action against HRH in the
Connecticut Superior Court alleging violations of the Connecticut Unfair Trade
Practices Act, Conn. Gen. Stat., §§ 42-110a et seq., and the Connecticut Unfair
Insurance Practices Act, Conn. Gen. Stat. §§ 38a-815 et seq., dated August 31,
2005 (the “Complaint”);

 

WHEREAS, the Insurance Commissioner of the State of Connecticut (the
“Commissioner”) has conducted an investigation into certain insurance brokerage
and insurance agency practices (the “Commissioner’s Investigation”) of HRH;

 

WHEREAS, the Attorney General has alleged in the Complaint that, inter alia, HRH
unlawfully: a) steered clients to favored insurance carriers to qualify for
larger bonuses and contingent commissions; b) moved blocks of clients to favored
insurers to qualify for larger bonuses and contingent commissions; c)
implemented a “carrier consolidation” program expressly designed to steer
clients to a select group of insurers in order to qualify for larger bonuses and
override commissions; d) placed clients in “producer captive” insurance carriers
of which HRH owned all or part without disclosing that ownership interest to its
clients; e) entered into undisclosed fee arrangements whereby insurers paid
undisclosed compensation to HRH for the placement of insurance; f) paid improper
premium rebates to clients in return for that client retaining HRH as its
broker; and g) provided preferred insurers with first looks on books of business
that HRH wished to move to preferred carriers in order to increase HRH’s bonus
and contingent compensation;

--------------------------------------------------------------------------------

WHEREAS, HRH is and has been cooperating with the Attorney General’s
Investigation and the Commissioner’s Investigation;

 

WHEREAS, HRH has adopted, and under this Agreement (the “Agreement”), will
continue to adopt, business reforms that will govern the conduct of HRH and its
employees;

 

WHEREAS, the Attorney General, the Commissioner, and HRH are entering into this
Agreement and HRH and the Commissioner are entering into a Stipulation and
Consent Order dated August 31, 2005 addressing issues relating to Women’s Health
USA, Inc. and other entities (the “WHUSA Stipulation”) solely for the purpose of
resolving all issues related to the Attorney General’s Investigation, the
Complaint, and the Commissioner’s Investigation, and such agreements are not
intended to be used for any other purpose;

 

WHEREAS, the Attorney General and the Commissioner find the relief and
agreements contained in this Agreement appropriate and in the public interest;

 

WHEREAS, without admitting or denying any of the foregoing or any of the
allegations of the Complaint, HRH is entering into this Agreement prior to any
court entering any findings of fact or conclusions of law relating to the
Attorney General’s Investigation, the Complaint, or the Commissioner’s
Investigation; and

 

WHEREAS, neither this Agreement, nor any acts performed nor documents executed
in furtherance of this Agreement, may be used as an admission of liability or
wrongdoing or of the claims or allegations of the Complaint;

 

2

--------------------------------------------------------------------------------

NOW THEREFORE, the Attorney General, the Commissioner, and HRH do hereby enter
into this Agreement and agree as follows:

 

MONETARY RELIEF

 

1. HRH shall pay thirty million dollars ($30,000,000.00) into a fund (the
“Fund”) over the next twenty four (24) months in two installments. The amount in
the Fund shall be divided and distributed to certain of HRH’s U.S. clients
(“Affected Policyholders”) as described below. HRH shall make an initial payment
of twenty million dollars ($20,000,000.00) into the Fund on or before February
1, 2006 and a second payment of ten million dollars ($10,000,000.00) into the
Fund on or before August 1, 2007. The Fund shall be allocated nineteen million
five hundred thousand dollars ($19,500,000) between Broker Clients and National
Override Clients as defined in Paragraph 2 below (the “Broker/Override Fund”)
and ten million five hundred thousand ($10,500,000) to Agent Clients as defined
in Paragraph 2 below (the “Agency Fund”). All of the money paid into the Fund
and any interest earned thereon shall be paid to Affected Policyholders pursuant
to the provisions set forth in this Agreement, except as may be specifically
provided for in Paragraph 7. No portion of the Fund shall be considered a fine
or a penalty. This sum is in full satisfaction of HRH’s obligations hereunder,
and, except for the fine as provided for in the WHUSA Stipulation and as
required to carry out HRH’s obligations under this Agreement and the WHUSA
Stipulation, neither the Attorney General nor the Commissioner shall seek to
impose on HRH any other financial obligation or liability related to the
Attorney General’s Investigation, the Complaint, or the Commissioner’s
Investigation.

 

2. For the purposes of this Agreement, “Affected Policyholders” shall mean: a)
all HRH U.S. brokerage business clients, as defined for purposes of this
Agreement

 

3

--------------------------------------------------------------------------------

according to a formula approved by the Attorney General and the Commissioner, on
whose insurance placements, renewals, consultations, or service HRH was eligible
to receive Contingent Compensation (as defined in Paragraph 12 below) between
January 1, 2001 and December 31, 2004 (“Broker Clients”); b) all HRH U.S. agency
clients on whose insurance placements, renewals, consultations, or service HRH
was eligible to receive Contingent Compensation pursuant to a National Override
Agreement between January 1, 2001 and December 31, 2004 (“National Override
Clients”); and c) all HRH U.S. agency clients, other than National Override
Clients, on whose insurance placements, renewals, consultations, or service HRH
was eligible to receive Contingent Compensation between January 1, 2001 and
December 31, 2004 (“Agent Clients”). For purposes of this Agreement, “National
Override Agreement” shall mean a corporate-wide compensation agreement that
resulted in HRH receiving Contingent Compensation and that was between HRH and
the Hartford Insurance Company, the Travelers Insurance Company, CNA Insurance
Company, Allmerica Insurance Company, MetLife Insurance Company, and
UnumProvident Insurance Company (collectively, the “National Override
Carriers”). An Affected Policyholder arising from an acquisition by HRH after
December 31, 2000, shall be included only as of the date of acquisition by HRH.

 

3. HRH shall a) by April 30, 2006, calculate in accordance with a formula
approved by the Attorney General and the Commissioner, the amount of money each
Broker Client and National Override Client is eligible to receive; b) within ten
(10) days of completing these calculations file a report with the Attorney
General and the Commissioner in a form approved by the Attorney General and the
Commissioner, certified under oath by an officer of HRH to the best of that
officer’s knowledge and

 

4

--------------------------------------------------------------------------------

belief, setting forth: i) each Broker Client’s and National Override Client’s
name and address; ii) each Broker Client’s and National Override Client’s
insurer(s), the product line(s) and/or type of policy(ies) purchased; iii) the
policy premium and the amount each Broker Client and National Override Client
paid for each such policy; iv) the amount of the distribution that each Broker
Client and National Override Client is eligible to receive from the Fund for
each such policy and in the aggregate for all such policies pursuant to this
Agreement; and c) by May 22, 2006, send a Notice of Election in a form and
format subject to the approval of the Attorney General and the Commissioner, to
each Broker Client and National Override Client setting forth items 3b)ii)
through 3b)iv) above and stating that the amount may increase if there is less
than full participation by eligible policyholders in the Fund. Broker Clients
and National Override Clients electing to receive a cash distribution from the
Fund (“Participating Policyholders”) shall make a final election to receive a
distribution from the Fund by returning the Notice of Election form to HRH, and
tendering a release to HRH in a form which in all material respects shall
conform to the form attached hereto as Exhibit A, no later than November 21,
2006.

 

4. HRH shall a) on or before April 1, 2006, send each Agent Client a Notice of
Settlement and Claim Form in a form subject to the approval of the Attorney
General and the Commissioner (the “Notice of Settlement and Claim Form”)
informing each Agent Client that they are eligible to receive a cash
distribution from the Fund. Agent Clients electing to be eligible to receive a
distribution from the Fund shall return the Notice of Settlement and Claim Form
to HRH by June 1, 2006. The Notice of Settlement and Claim Form shall include a
statement from the Agent Client that the Agent Client believed HRH put that
client’s interests first when HRH placed their insurance. Such

 

5

--------------------------------------------------------------------------------

statement may be unsworn, must contain the original signature of the client (if
a natural person) or an authorized representative (if a non-natural person), and
is not otherwise subject to challenge by HRH.

 

5. HRH shall a) by August 1, 2006, calculate in accordance with a formula
approved by the Attorney General and the Commissioner the amount of distribution
from the Fund each Agent Client returning the Notice of Settlement and Claim
Form (“Eligible Agent Clients”) is eligible to receive from the Fund; b) within
ten (10) days of completing these calculations file a report with the Attorney
General and the Commissioner, certified under oath by an officer of HRH to the
best of that officer’s knowledge and belief, setting forth i) each Eligible
Agent Client’s name and address; ii) the Eligible Agent Client’s insurer(s), the
product line(s) and/or type of policy(ies) purchased; iii) the policy premium
and the amount the Eligible Agent Client paid for each such policy; iv) the
amount of the distribution that each Eligible Agent Client is eligible to
receive from the Fund for each such policy and in the aggregate for all such
policies pursuant to this Agreement; and c) by August 21, 2006, send a Notice of
Election in a form and format subject to the approval of the Attorney General
and the Commissioner, to each Eligible Agent Client setting forth items 5b)ii)
through 5b)iv) above. Each Eligible Agent Client shall make a final election to
receive a distribution from the Fund by returning the Notice of Election form to
HRH and tendering a release to HRH in a form which in all material respects
shall conform to the form attached hereto as Exhibit A, no later than November
21, 2006 (“Participating Agent Clients”).

 

6. The Attorney General and the Commissioner acknowledge the following: a)
contingency income based on profitability of business (or other factors beyond

 

6

--------------------------------------------------------------------------------

volume) may not be calculable on a per policy basis and that the calculations
required by this Agreement are good faith approximations; b) that for some
eligible policyholders all required data may not be available, and that HRH
shall use reasonable and good faith efforts in such instances to: i) obtain the
information directly from the policyholders by sending an information request
form to the policyholder and/or ii) provide a good faith estimate for the amount
of eligible compensation.

 

7. On January 15, 2007 (the “First Distribution”) and January 15, 2008 (the
“Second Distribution”) HRH shall pay proportionally to each Participating
Policyholder and each Participating Agent Client as much of the Participating
Policyholder’s and Participating Agent Client’s aggregate share of the Fund as
possible with the monies then available in the Fund pursuant to a calculation
agreed to by the Attorney General and the Commissioner. HRH reserves the right
to make the second required payment into the Fund, in whole or in part, as of
January 15, 2007, if the total due to all Participating Policyholders and all
Participating Agent Clients as of the First Distribution exceeds the funds in
the Fund at that time. In the event that any Affected Policyholder elects not to
participate or otherwise does not respond (the “Non-Participating
Policyholders”), that Affected Policyholder’s allocated share may be used by HRH
to satisfy any pending or other claims of policyholders relating to these
matters and to reimburse HRH for any payments made by HRH between September 1,
2005 and April 15, 2008 to policyholders having claims related to this
Agreement. In no event shall HRH be reimbursed pursuant to the preceding
sentence or a distribution be made from the Fund to any Non-Participating
Policyholder until all Participating Policyholders and Participating Agent
Clients have been paid the full aggregate amount due pursuant to Paragraphs
3b)iv) and

 

7

--------------------------------------------------------------------------------

5b)iv) above; nor shall the total payments from the Fund to any
Non-Participating Policyholder exceed 80% of that Non-Participating
Policyholder’s original allocated share. In no event shall a Participating Agent
Client’s relative percentage distribution from the Fund be greater than the
percentage distribution of a Participating Policyholder. If any funds remain in
the Fund as of April 15, 2008, any such funds shall be distributed on a pro rata
basis to the Participating Policyholders and Participating Agent Clients. In no
event shall any monies in or from the Fund be used to pay attorney fees.

 

8. By February 15, 2007, with respect to the First Distribution and by February
15, 2008, with respect to the Second Distribution, HRH shall file a report with
the Attorney General and the Commissioner, certified under oath by an officer of
HRH to the best of that officer’s knowledge and belief, listing all amounts paid
from the Fund.

 

BUSINESS REFORMS

 

9. Within sixty (60) days of the execution of this Agreement HRH shall undertake
the following business reforms.

 

A. Permissible Forms of Compensation

 

10. a) In connection with its insurance brokerage business, defined for the
purposes of this Agreement to include insurance placements, renewal, servicing,
consulting and other services related to insurance policies placed by HRH acting
as a representative of a client pursuant to a written agreement with the client
and not as an agent of an insurer or as a wholesaler, HRH shall accept only: i)
a specific fee to be paid by the client; ii) a specified commission to be paid
by the insurer; or iii) where allowed by law, a combination of both.

 

b) HRH shall accept no commission or other compensation of any kind from any
insurer for the placement, renewal, consultation, or servicing of a brokerage
client’s

 

8

--------------------------------------------------------------------------------

insurance business unless and until a written contract signed by such client so
provides or, prior to binding HRH: i) fully discloses to the client in plain,
unambiguous written language such commission or other compensation in either
dollars or percentage amounts; and ii) the client consents in writing, provided,
however, that where the amount of such commission or compensation or the method
of calculation necessary to determine the amount of such commission or other
compensation is not known less than 24 hours before renewal or inception of
client’s policy, HRH shall: i) prior to binding, disclose in writing the general
methodology by which its commission is calculated; and ii) as soon after binding
as practicable, provide the client with written disclosure of its commission in
dollars or percentage amounts and obtain the client’s written consent. HRH shall
not accept compensation attributable to such placement until such disclosure is
made and consent is received. If the client does not so consent, the client may
timely cancel or terminate the contract. In this circumstance, HRH may not
directly impose a penalty on the client for such cancellation, although the
client may be subject to a penalty imposed by the carrier. Nothing in this
Paragraph relieves HRH of complying with additional requirements imposed by law,
including the requirements for written documentation relating to fees paid
directly by clients. HRH may not retain interest earned on premiums collected on
behalf of insurers without prior notification to the client, and only when such
retention is consistent with the requirements of, and is permitted by,
applicable law.

 

11. Except as provided in Paragraph 10 above, in connection with its insurance
brokerage business, HRH shall not accept or request, directly or indirectly, any
thing of material value from an insurance company including, but not limited to,
money, credits, loans, stock, forgiveness of principal or interest, vacations,
prizes, gifts or the payment of employee salaries or expenses (“Additional
Compensation”).

 

9

--------------------------------------------------------------------------------

B. Contingent Compensation

 

12. In connection with its insurance brokerage business, HRH shall not directly
or indirectly accept or request any Contingent Compensation. For purposes of
this Agreement, “Contingent Compensation” shall mean any compensation or other
valuable consideration of any kind paid by an insurance carrier that is
contingent upon HRH’s: a) placing a particular number of policies or dollar
value of premium with the insurer, excepting standard commissions, b) achieving
a particular level of growth in the number of policies or dollar value of
premium placed with an insurer, c) meeting a particular rate of retention or
renewal of policies in force with an insurer, d) placing or keeping sufficient
insurance business with the insurer to achieve a particular loss ratio or any
other measure of profitability, e) providing preferential treatment in the
placement process, including but not limited to the giving of last looks, first
looks, rights of first refusal, or limiting the number of quotes sought from
insurers for insurance placements, or f) obtaining anything else of material
value for an insurer.

 

13. In connection with its insurance agency business, defined herein as all HRH
business in which HRH is not acting either as an insurance broker as defined in
Paragraph 10a) above or as a wholesaler for other licensed producers, HRH shall
not directly or indirectly accept or request any Contingent Compensation, except
where HRH discloses to all HRH clients the substantive information contained in
Exhibit B attached hereto in the following manner: a) no later than January 1,
2006 ,HRH shall transmit by U.S. mail to all HRH clients a copy of Exhibit B; b)
beginning 60 days after the date of the execution of this Agreement, for all new
agency clients who engage HRH, HRH shall

 

10

--------------------------------------------------------------------------------

obtain a signed copy of Exhibit B from each such client prior to initial
binding, provided, however, that where the transaction is completed wholly over
the telephone, an HRH agent shall read the substance of the notification in
Exhibit B to the client, make a note in the client’s file that such notification
was done and transmit by U.S. mail or email a copy of Exhibit B to the client.
Upon request by any HRH client, HRH shall fully disclose all commissions, in
either dollars or percentage amounts, and the brief substance of all Additional
Compensation and Contingent Compensation arrangements to the client. When such
request is made, HRH shall promptly respond to such request. Where such response
to a client’s request occurs after binding, the client may timely cancel the
contract with no penalty directly imposed by HRH, although the client may be
subject to a penalty imposed by the carrier. Notwithstanding any other provision
of this Agreement, in no event shall HRH accept any compensation with respect to
its agency business based, in whole or in part, on achieving a particular loss
ratio, or any other measure of profitability, with an insurer where HRH has any
authority to settle any HRH client claims made against such insurer. Nothing in
this Paragraph relieves HRH from complying with additional requirements imposed
by law, including any requirements for written documentation relating to fees
paid directly by clients.

 

C. Prohibition of Reinsurance Brokerage “Leveraging”

 

14. In placing, renewing, consulting on, or servicing any insurance policy, HRH
shall not directly or indirectly accept or request any promise or commitment to
use any of HRH’s brokerage, agency, producing, or consulting services, including
reinsurance brokerage, agency or producing services, contingent upon any of the
factors listed in Paragraph 12a) through f), inclusive, above.

 

11

--------------------------------------------------------------------------------

D. Prohibition of Inappropriate Use of Wholesalers

 

15. a) In placing, renewing, consulting on, or servicing any insurance policy,
HRH shall not directly or indirectly knowingly place, renew, consult on, or
service its clients’ insurance business through a wholesale broker in connection
with HRH’s insurance brokerage business unless HRH discloses the following
information prior to initial binding, where such information is known, and in
any event as soon as practicable after binding when the following information is
not known prior to binding: i) the compensation received or to be received by
HRH; ii) the existence of any HRH interest in or contractual agreement with the
wholesaler; and iii) upon request, the reasons for using such wholesaler.

 

b) In placing, renewing, consulting on, or servicing any insurance policy, HRH
shall not directly or indirectly knowingly place, renew, consult on, or service
its clients’ insurance business through an affiliated wholesale broker in
connection with HRH’s insurance agency business unless HRH discloses the
following information prior to initial binding, where such information is known,
and in any event as soon as practicable after binding when the following
information is not known prior to binding: i) the fact that HRH will receive
compensation related to the wholesale transaction; and ii) upon request of the
client, the compensation received or to be received by HRH on the wholesale
transaction, any HRH interest in or contractual agreement with the wholesaler,
and the reasons for using such wholesaler.

 

E. Prohibition of Interest in Insurer

 

16. HRH shall not place business in any insurer or reinsurer in which Hilb Rogal
& Hobbs Company has any direct beneficial ownership interest or indirect
beneficial interest through a controlled entity without disclosing to the HRH
client prior

 

12

--------------------------------------------------------------------------------

to the time of binding the fact of such ownership interest or affiliation. As
part of its SEC annual report for 2005 through 2010, Hilb Rogal & Hobbs Company
shall disclose the fact of material ownership in any insurer or reinsurer by any
officer or director of Hilb Rogal & Hobbs Company. For purposes of this
Paragraph, “material ownership” shall mean an ownership interest valued at
greater than one million dollars ($1,000,000.00).

 

F. Mandated Disclosures to Clients

 

17. In placing, renewing, consulting on, or servicing any insurance policy, in
connection with its brokerage business, HRH shall not accept compensation
attributable to the client until it discloses to that client in writing all
quotes and indications sought and all quotes and indications received by HRH, in
connection with the coverage of the client’s risk together with all terms
relevant thereto.

 

18. In placing, renewing, consulting on, or servicing any insurance policy, in
connection with its agency business, HRH shall, upon request, disclose to each
client in writing all quotes and indications sought and all quotes and
indications received in connection with the coverage of the client’s risk
together with all terms relevant thereto.

 

G. Standards of Conduct and Training

 

19. HRH shall implement company-wide written standards of conduct regarding
commissions, Additional Compensation and Contingent Compensation from insurers
consistent with the terms of this Agreement and subject to the initial approval
of the Attorney General and the Commissioner, which shall not unreasonably be
withheld. Such company-wide written standards of conduct shall provide, inter
alia, that HRH shall periodically conduct appropriate training of all relevant
employees, including, but not limited to, training in business ethics,
professional obligations, conflicts of interest, antitrust and fair trade
practices compliance, and record keeping. Training of all current

 

13

--------------------------------------------------------------------------------

relevant HRH employees shall begin within six months of the execution of this
Agreement. Training of all subsequently hired relevant HRH employees shall be
conducted at the time of the new employee’s hire. Such company-wide written
standards shall require HRH personnel to notify an insurer of an insured’s claim
or loss promptly, and in no event more than two (2) business days, after notice
to HRH of any such claim.

 

H. Prohibition Against Violating Connecticut Law

 

20. HRH shall not directly or indirectly engage or attempt to engage in
violations of the Connecticut Antitrust Act (Conn. Gen. Stat. §§ 35-24 et seq.),
the Connecticut Unfair Trade Practices Act (Conn. Gen. Stat. §§ 42-110a et
seq.), and the Connecticut Unfair Insurance Practices Act (Conn. Gen. Stat. §§
38a-815 et seq.).

 

COMPLIANCE AND REPORTING

 

21. HRH shall establish a Business Practices Committee of the Board of Directors
of HRH which shall review HRH’s compliance with the standards of conduct
regarding commissions, Additional Compensation, and Contingent Compensation and
shall report on a semi-annual basis to the Board of Directors the results of its
reviewing activities for a period of five (5) years from the date of this
Agreement.

 

22. HRH shall maintain a record of all written complaints received from HRH
clients concerning commissions, Additional Compensation, and Contingent
Compensation, which shall be provided to the Business Practices Committee of the
Board of Directors prior to its semi-annual report, and to the Commissioner
annually for a period of five (5) years commencing from the date of this
Agreement.

 

23. The Business Practices Committee of the Board of Directors of HRH shall file
annual written reports with the Commissioner on compliance with the standards of
conduct regarding compensation arrangements for five (5) years beginning with
the 2006

 

14

--------------------------------------------------------------------------------

calendar year, which reports shall include the amount of each form of
compensation and Contingent Compensation received by HRH from each insurer with
which it placed insurance during the preceding calendar year.

 

COOPERATION WITH THE COMMISSIONER

 

24. At the Commissioner’s discretion, HRH shall be subject to annual examination
by the Commissioner for five (5) years at HRH’s expense beginning in 2005. HRH
shall fully cooperate with the Commissioner in such examinations. HRH shall
additionally provide private, secure office space, photocopying equipment, and
any other administrative or clerical resources reasonably necessary to assist in
any examination, as well as all relevant data, provided upon request by the
Commissioner in electronic or computerized format. The Commissioner may
coordinate such examinations with other states.

 

COOPERATION WITH THE ATTORNEY GENERAL AND THE COMMISSIONER

 

25. HRH shall fully and promptly cooperate with the Attorney General and the
Commissioner with regard to their ongoing investigations of compensation
practices in the insurance and insurance brokerage and agency industries, any
related proceedings and actions, and of any other person, corporation or entity
related to such investigations, including, but not limited to, HRH’s current and
former employees. HRH shall use its best efforts to ensure that all its
officers, directors, employees, and agents fully and promptly cooperate with the
Attorney General’s and the Commissioner’s investigations of insurance and
insurance brokerage and agency compensation practices and related proceedings
and actions. Cooperation shall include without limitation: a) acceptance of
service of subpoena(s) and production pursuant thereto of any information and
all

 

15

--------------------------------------------------------------------------------

documents or other tangible evidence reasonably requested by the Attorney
General or the Commissioner, and any compilations or summaries of information or
data that the Attorney General or the Commissioner reasonably requests be
prepared, subject only to the receipt of reasonable assurances of confidential
treatment of such information produced without service of subpoena; b) without
the necessity of a subpoena, having HRH’s officers, directors, employees and
agents attend any proceedings at which the presence of any such persons is
requested by the Attorney General or the Commissioner, and having such persons
answer any and all inquiries that may be put by the Attorney General (or any of
the Attorney General’s deputies, assistants or agents) or the Commissioner to
any of them at any proceedings or otherwise (“proceedings” shall include, but
are not limited to, any meetings, interviews, depositions, hearings, grand jury
hearing, trial or other proceedings); c) fully, fairly and truthfully disclosing
all information and producing all records and other evidence in its possession
relevant to all inquiries reasonably made by the Attorney General or the
Commissioner concerning any fraudulent conduct whatsoever about which it has any
knowledge or information; d) in the event any document is withheld or redacted
on grounds of privilege, work-product, or other legal doctrine, a statement
shall be submitted in writing by HRH indicating: i) the type of document; ii)
the date of the document; iii) the author and recipient of the document; iv) the
general subject matter of the document; v) the reason for withholding the
document; and vi) the Bates number or range of the withheld document. The
Attorney General or the Commissioner may challenge such claim in any forum of
its choice and may, without limitation, rely on all documents or communications
theretofore produced or the contents of which have been described by HRH, its
officers, directors,

 

16

--------------------------------------------------------------------------------

employees, or agents; and e) HRH shall not knowingly jeopardize the
confidentiality of any aspect of the Attorney General’s Investigation or the
Commissioner’s Investigation, including sharing or disclosing evidence,
documents, or other information with others during the course of the
investigation, without the consent of the Attorney General and the Commissioner.
Nothing herein shall prevent HRH from providing such evidence to other
regulators or as otherwise required by law, or from defending itself in
connection with any other judicial or regulatory proceeding or investigation.

 

OTHER PROVISIONS

 

26. The Commissioner may take regulatory action to enforce this Agreement. The
Commissioner may investigate or take regulatory action against any current or
former HRH employee who is licensed by the Commissioner.

 

27. HRH shall not seek or accept, directly or indirectly, indemnification
pursuant to any insurance policy, with regard to any or all of the amounts
payable pursuant to this Agreement and the WHUSA Stipulation.

 

28. Upon execution of this Agreement by all parties, the Attorney General will
immediately file a Withdrawal with prejudice, in the form attached as Exhibit C,
in the Connecticut Superior Court voluntarily withdrawing the Complaint with
prejudice.

 

29. This Agreement is not intended to disqualify HRH, or any current employees
of HRH, from engaging in any business in Connecticut, or in any other
jurisdiction. Nothing in this Agreement shall relieve HRH’s obligations imposed
by any applicable state insurance law or regulations or other applicable law.

 

30. This Agreement shall not confer any rights upon any persons or entities
besides the Attorney General, the Commissioner, and HRH.

 

17

--------------------------------------------------------------------------------

31. HRH shall maintain custody of, or make arrangements to have maintained, all
documents and records of HRH related to this matter for a period of not less
than six (6) years.

 

32. The Attorney General and/or the Commissioner may make such application as
appropriate to enforce or interpret the provisions of this Agreement, or in the
alternative, maintain any action within their legal authority for such other and
further relief as either the Attorney General and/or Commissioner may determine
in their sole discretion is proper and necessary for the enforcement of this
Agreement. The exclusive forum for resolving any disputes under this Agreement
shall be the Superior Court of the State of Connecticut, or the Connecticut
Insurance Department as required by law. If compliance with any aspect of this
Agreement proves impracticable, HRH reserves the right to request that the
parties modify the Agreement accordingly.

 

33. The parties to this Agreement will use good faith and best efforts in
implementing the terms of this Agreement and resolving any unanticipated issues.

 

34. In any application, legal action or proceeding, facsimile transmission of
any papers to current counsel for HRH shall be good and sufficient service on
HRH unless HRH designates, in a writing to the Attorney General, another person
to receive service by facsimile transmission.

 

35. This Agreement shall be governed by the laws of the State of Connecticut
without regard to conflict of laws principles.

 

36. This Agreement may be executed in counterparts.

 

WHEREFORE, the following signatures are affixed hereto on this 31st day of
August, 2005.

 

18

--------------------------------------------------------------------------------

RICHARD BLUMENTHAL   SUSAN F. COGSWELL

/s/ Richard Blumenthal

--------------------------------------------------------------------------------

 

/s/ Susan F. Cogswell

--------------------------------------------------------------------------------

Attorney General   Insurance Commissioner State of Connecticut   State of
Connecticut 55 Elm Street   P.O. Box 816 Hartford, Connecticut 06141   Hartford,
Connecticut 06142-0816

 

HILB ROGAL & HOBBS COMPANY By:  

/s/ Martin L. Vanghan III

--------------------------------------------------------------------------------

    Martin L. Vanghan III     Chairman & CEO of HRH By:  

/s/ David Craig Landin

--------------------------------------------------------------------------------

    David Craig Landin     John W. Woods, Jr.     Hunton & Williams LLP    
Riverfront Plaza, East Tower     951 East Byrd Street     Richmond, Virginia
23219-4074     (804) 788-8200     Attorneys for Hilb Rogal & Hobbs Company By:  

/s/ Ross H. Garber

--------------------------------------------------------------------------------

    Ross H. Garber     Shipman & Goodwin LLP     One Constitution Plaza    
Hartford, CT 06103-1919     (860) 251-5218     Attorneys for Hilb Rogal & Hobbs
Company

 

19

--------------------------------------------------------------------------------

EXHIBIT A

 

GENERAL RELEASE

 

This RELEASE (the “RELEASE”) is executed this      day of                     ,
200   by RELEASOR (defined below) in favor of RELEASEE (defined below).

 

DEFINITIONS

 

“RELEASOR” refers to [fill in name                     ] and any of its
affiliates, subsidiaries, associates, general or limited partners or
partnerships, predecessors, successors, or assigns, including, without
limitation, any of their respective present or former officers, directors,
trustees, employees, agents, attorneys, representatives and shareholders,
affiliates, associates, general or limited partners or partnerships, heirs,
executors, administrators, predecessors, successors, assigns or insurers acting
on behalf of RELEASOR.

 

“RELEASEE” refers to Hilb Rogal & Hobbs Company and any of its subsidiaries,
affiliates, associates, general or limited partners or partnerships,
predecessors, successors, or assigns, including, without limitation, any of
their respective present or former officers, directors, trustees, employees,
agents, attorneys, representatives and shareholders, affiliates, associates,
general or limited partners or partnerships, heirs, executors, administrators,
predecessors, successors, assigns or insurers.

 

“AGREEMENT” refers to a certain agreement among RELEASEE, the Attorney General
of the State of Connecticut (the “Attorney General”), and the Insurance
Commissioner of the State of Connecticut (the “Commissioner”) dated August 31,
2005, relating to an action commenced against RELEASEE by the Attorney General
dated August 31, 2005 captioned The State of Connecticut against Hilb Rogal &
Hobbs Company (the “Complaint”), and an investigation by the Commissioner
relating to same (the “Investigation”).

 

RELEASE

 

1. In consideration for the total payment of $             in accordance with
the terms of the Agreement, RELEASOR does hereby fully release, waive and
forever discharge RELEASEE from any and all claims, demands, debts, rights,
causes of action or liabilities whatsoever, including known and unknown claims,
in law, equity or otherwise, whether under state, federal or foreign statutory
or common law, and whether possessed or asserted directly, indirectly,
derivatively, representatively or in any other capacity (collectively,
“claims”), only to the extent any such claims are based upon or arise out of, in
whole or in part, any of the allegations, acts, omissions, transactions, or
events that are the subject of the Complaint and the Investigation and occurring
up to the date of the Agreement, except for claims which are based upon, arise
out of or relate to the purchase or sale of RELEASEE securities, and claims
based upon or arising out of conduct by RELEASEE after the date of the
Agreement.

--------------------------------------------------------------------------------

2. In the event that the total payment referred to in paragraph 1 is not made
for any reason, then this RELEASE shall be null and void, provided that any
payments received by RELEASOR shall be credited to RELEASEE in connection with
any claims that RELEASOR may assert against RELEASEE, or that are asserted on
behalf of RELEASOR or by a class of which RELEASOR is a member, against
RELEASEE.

 

3. This RELEASE may not be changed orally and shall be governed by and
interpreted in accordance with the laws of the State of Connecticut, without
giving effect to choice of law principles, except to the extent that federal law
requires that federal law governs.

 

4. RELEASOR represents and warrants that the claims have not been sold, assigned
or hypothecated in whole or in part.

 

Dated:  

 

--------------------------------------------------------------------------------

RELEASOR:  

 

--------------------------------------------------------------------------------

By:  

 

--------------------------------------------------------------------------------

Print Name:  

 

--------------------------------------------------------------------------------

Title:  

 

--------------------------------------------------------------------------------

 

2

--------------------------------------------------------------------------------

EXHIBIT B

 

HRH AGENCY CUSTOMER BILL OF RIGHTS

 

As an HRH agency customer, you have the right to know:

 

  •   That HRH, like other insurance agents, represents insurance companies and
is paid by insurance companies for selling insurance to clients like you.

 

  •   All fees and commissions that HRH will earn on the sale of your insurance.
Simply ask your HRH representative.

 

  •   That HRH earns a commission based on a percentage of the premium you pay
to the insurance company. HRH, like other insurance agents, may also be paid
additional amounts by insurance companies based on other factors, such as the
number of policies placed or renewed with an insurer, the amount of premiums
paid, or the loss histories of clients placed or renewed with an insurer.

 

  •   HRH’s commissions are built into the cost of your insurance.

 

  •   That HRH, like other insurance agents, may receive compensation for
placing your insurance from other intermediaries, such as wholesalers and
premium finance companies, which may or may not be affiliated with HRH. That
compensation may be in the form of commissions, administrative fees, placement
fees, interest, or other compensation.

 

  •   That insurance companies with which you may be placed may offer incentives
and rewards to HRH, such as trips and entertainment.

 

  •   That HRH may earn interest on your premiums before paying your premium to
the applicable insurance companies.

 

  •   Which insurers competed for your business and see in writing what prices
they offered or whether they declined to make an offer. Simply ask your HRH
representative.

 

Received by:    

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

DATE   CLIENT

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

DATE   HRH EMPLOYEE

--------------------------------------------------------------------------------

EXHIBIT C

WITHDRAWAL

JD-CV-41 Rev 10-01

 

COMPLETE ALL SECTIONS BELOW

 

STATE OF CONNECTICUT

SUPERIOR COURT

www.jud.state.ct.us

 

DOCKET NO

  #

   

RETURN DATE

  9/20/05

 

NAME OF CASE (FIRST-NAMED PLAINTIFF VS. FIRST-NAMED DEFENDANT)

    State of Connecticut vs. Hilb Rogal & Hobbs Company

 

x

  

Judicial

District

   ¨   

Housing

Session

   ¨      G.A. No.                  

ADDRESS OF COURT (No., street, town and zip code)

95 Washington Street, Hartford, CT 06106

 

SECTION I (check only one box) THIS WITHDRAWAL IS BEING FILED BECAUSE THE
DISPUTE HAS BEEN RESOLVED BY:

 

          I. COURT-ANNEXED ADR    II. COURT INTERVENTION                 411088
   ¨    Early Intervention          411098    ¨      Pretrial Conference 411089
   ¨    Early Neutral Evaluation    411099    ¨      Trial Management Conference
411090    ¨    Attorney Trial Referee    411100    ¨     
Commencement of Trial         (court trial - first witness sworn; 411091    ¨   
Fact-Finding                                                            
         jury trial - trial jurors sworn) 411093    ¨    Arbitration        
III. PRIVATE ADR 411094    ¨    Mediation         411102    ¨      Provider
Name:     411095    ¨    Special Masters               
_______________________________________ 411096    ¨    Summary Jury Trial    IV.
OTHER                     411103    x      Discussion of Parties on Their Own  
                  415602    ¨      Unilateral Action of Party(ies)

 

SECTION II                                         
                              WITHDRAWAL

 

(Do not check the following two boxes if any intervening complaints, cross
complaints, counterclaims, or third party complaints remain pending in this
case. See below for partial withdrawal of action)

 

DISPOSITIVE

    (WDACT)

  x   The Plaintiff’s action is WITHDRAWN AS TO ALL DEFENDANTS without costs to
any party.                    

    (WOARD)

  ¨   A judgment has been rendered against Defendant(s):                        
   
____________________________________________________________________________________________
                            and the Plaintiff’s action is WITHDRAWN AS TO ALL
REMAINING DEFENDANTS without costs                    

 

PARTIAL     The    

(WDCOMP)

  ¨   Complaint

(WDCOUNT)

  ¨   Counts of the complaint:                                      
                                        
                                                                

(WDINTCO)

  ¨   Intervening Complaint

(WDTHPC)

  ¨   Third Party Complaint

(WAPPCOM)

  ¨   Apportionment Complaint

(WDCC)

  ¨   Cross Complaint (cross claim)

(WOC)

  ¨   Counterclaim

(WOAAP)

  ¨   Plaintiff(s):                                    
                                        
                                                                              

(WOAAD)

  ¨   Complaint against defendant(s):                                         
                                                 Only w/o costs     ¨   Other:
                                        
                                        
                                                                              in
the above entitled action is withdrawn.

 

________________________________________________________________________________________________________________________________________________________________

SIGNATURE REQUIRED

                        

 

Plaintiff

   State of Connecticut    ;              By    /s/ Matthew J. Budzik   
Attorney

 

Plaintiff

        ;              By   

Matthew J. Budzik, Asst. Atty. General

 

   Attorney

Defendant

        ;              By         Attorney

Defendant

        ;              By         Attorney                                     

 

NAME & ADDRESS

OF SIGNER:

  Matthew J. Budzik, Asst. Atty. General, Attorney General’s Office, 55 Elm
Street, Hartford, CT 06106

 

SECTION III                                         
                              CERTIFICATION

 

I hereby certify that a copy was mailed/delivered to all counsel and pro se
parties of record on:    DATE
8/31/05   

SIGNED (Individual attorney or pro se party)

/s/ Matthew J. Budzik

   PHONE NO. (Area code first)
860/808-5040

 

NAME OF EACH PARTY SERVED*

Ross H. Garber, Esq., Shipman & Goodwin LLP

  

ADDRESS AT WHICH SERVICE WAS MADE*

One Constitution Plaza, Hartford, CT 06103-1919

 

* if necessary, attach additional sheet with names of each party served and the
address at which service was made.