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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2005



Commission File Number 0-15981



HILB ROGAL & HOBBS COMPANY

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Virginia                                                       |  | 54-1194795                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|4951 Lake Brook Drive, Suite 500 Glen Allen, Virginia          |  | 23060                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



(804) 747-6500

(Registrants telephone number, including area code)



Indicate by check mark whether the registrant:    (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.



Yes  x    No ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).



Yes  x    No ̈



Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).



Yes ̈No  x



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable
date.



|                           |  |                                
|-------------------------- |  | -------------------------------
|Class                      |  | Outstanding at October 31, 2005
|Common Stock, no par value |  | 35,808,454                     



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##### Table of Contents

HILB ROGAL & HOBBS COMPANY

INDEX



|           |  |                                            |  |                                                                                                         |  |        
|---------- |  | ------------------------------------------ |  | ------------------------------------------------------------------------------------------------------- |  | -------
|           |  |                                            |  |                                                                                                         |  | Page   
|Part I.    |  | FINANCIAL INFORMATION                      |  |                                                                                                        
|           |  |                                            | 
|           |  | Item 1.                                    |  | Financial Statements                                                                                    |  |        
|           |  |                                            | 
|           |  |                                            |  | Statement of Consolidated Income for the three months and nine months ended September 30, 2005 and 2004 |  | 2      
|           |  |                                            | 
|           |  |                                            |  | Consolidated Balance Sheet September 30, 2005 and December 31, 2004                                     |  | 3      
|           |  |                                            | 
|           |  |                                            |  | Statement of Consolidated Shareholders Equity for the nine months ended September 30, 2005 and 2004    |  | 4      
|           |  |                                            | 
|           |  |                                            |  | Statement of Consolidated Cash Flows for the nine months ended September 30, 2005 and 2004              |  | 5      
|           |  |                                           
|           |  | Notes to Consolidated Financial Statements |  | 6  13                                                                                                 
|           |  |                                            | 
|           |  | Item 2.                                    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                   |  | 14  19
|           |  |                                            | 
|           |  | Item 3.                                    |  | Quantitative and Qualitative Disclosure About Market Risk                                               |  | 19     
|           |  |                                            | 
|           |  | Item 4.                                    |  | Controls and Procedures                                                                                 |  | 19     
|           |  |                                           
|Part II.   |  | OTHER INFORMATION                          |  |                                                                                                        
|           |  |                                            | 
|           |  | Item 1.                                    |  | Legal Proceedings                                                                                       |  | 20     
|           |  |                                            | 
|           |  | Item 2.                                    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                             |  | 20     
|           |  |                                            | 
|           |  | Item 6.                                    |  | Exhibits                                                                                                |  | 21     
|           | 
|Signatures |  | 22                                        



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##### Table of Contents

HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



STATEMENT OF CONSOLIDATED INCOME

(UNAUDITED)



PART IFINANCIAL INFORMATION



|Item 1. | FINANCIAL STATEMENTS.
|------- | ---------------------



|                                         |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|---------------------------------------- |  | -------------------------------- | ------- | ------------------------------- | ---- | - | ------- |  | ---- | ------- |  | - | -------
|                                         |  | Three Months Ended September 30, |         | Nine Months Ended September 30,
|                                         |  |                                 
|(in thousands, except per share amounts) |  | 2005                             |         |                                 | 2004 |   | 2005    |  | 2004
|REVENUES                                 |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|Commissions and fees                     |  | $                                | 161,119 |                                 |      | $ | 151,622 |  | $    | 499,808 |  | $ | 453,692
|Investment income                        |  |                                  | 1,633   |                                 |      |   | 788     |  |      | 4,221   |  |   | 2,099  
|Other                                    |  |                                  | 1,739   |                                 |      |   | 1,290   |  |      | 5,834   |  |   | 3,891  
|                                         |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|                                         |  |                                  | 164,491 |                                 |      |   | 153,700 |  |      | 509,863 |  |   | 459,682
|                                         |  |                                  |         |                                
|OPERATING EXPENSES                       |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|Compensation and employee benefits       |  |                                  | 90,742  |                                 |      |   | 81,474  |  |      | 274,597 |  |   | 244,344
|Other operating expenses                 |  |                                  | 29,893  |                                 |      |   | 28,313  |  |      | 95,423  |  |   | 80,290 
|Depreciation                             |  |                                  | 2,122   |                                 |      |   | 2,136   |  |      | 6,402   |  |   | 6,465  
|Amortization of intangibles              |  |                                  | 4,783   |                                 |      |   | 3,444   |  |      | 14,197  |  |   | 9,125  
|Interest expense                         |  |                                  | 4,300   |                                 |      |   | 2,546   |  |      | 12,097  |  |   | 7,460  
|Regulatory charge and related costs      |  |                                  | 42,320  |                                 |      |   |        |  |      | 42,320  |  |   |       
|Severance charge                         |  |                                  |        |                                 |      |   |        |  |      | 1,303   |  |   |       
|Integration costs                        |  |                                  |        |                                 |      |   | 176     |  |      | 764     |  |   | 1,803  
|                                         |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|                                         |  |                                  | 174,160 |                                 |      |   | 118,089 |  |      | 447,103 |  |   | 349,487
|                                         |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|INCOME BEFORE INCOME TAXES               |  |                                  | (9,669  | )                               |      |   | 35,611  |  |      | 62,760  |  |   | 110,195
|                                         |  |                                  |         |                                
|Income tax expense (benefit)             |  |                                  | (2,821  | )                               |      |   | 14,262  |  |      | 26,083  |  |   | 44,108 
|                                         |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|NET INCOME (LOSS)                        |  | $                                | (6,848  | )                               |      | $ | 21,349  |  | $    | 36,677  |  | $ | 66,087 
|                                         |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|Net Income (Loss) Per Share:             |  |                                  |         |                                 |      |   |         |  |      |         |  |   |        
|Basic                                    |  | $                                | (0.19   | )                               |      | $ | 0.60    |  | $    | 1.03    |  | $ | 1.85   
|Assuming Dilution                        |  | $                                | (0.19   | )                               |      | $ | 0.58    |  | $    | 1.01    |  | $ | 1.81   





See notes to consolidated financial statements.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEET



|                                                                                                                     |  |                   |           |                  |   |           |  
|-------------------------------------------------------------------------------------------------------------------- |  | ----------------- | --------- | ---------------- | - | --------- | -
|(in thousands)                                                                                                       |  | September 30,2005 |           | December 31,2004 |  
|                                                                                                                     |  | (UNAUDITED)       |           |                  |  
|ASSETS                                                                                                               |  |                   |           |                  |   |           |  
|CURRENT ASSETS                                                                                                       |  |                   |           |                  |   |           |  
|Cash and cash equivalents, including $54,629 and $55,909, respectively, of restricted funds                          |  | $                 | 219,788   |                  | $ | 210,470   |  
|Receivables:                                                                                                         |  |                   |           |                  |   |           |  
|Premiums and commissions, less allowance for doubtful accounts of $5,163 and $4,630, respectively                    |  |                   | 203,983   |                  |   | 211,299   |  
|Other                                                                                                                |  |                   | 35,929    |                  |   | 29,122    |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|                                                                                                                     |  |                   | 239,912   |                  |   | 240,421   |  
|Prepaid expenses and other current assets                                                                            |  |                   | 35,706    |                  |   | 24,586    |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|TOTAL CURRENT ASSETS                                                                                                 |  |                   | 495,406   |                  |   | 475,477   |  
|                                                                                                                     |  |                  
|PROPERTY AND EQUIPMENT, NET                                                                                          |  |                   | 25,374    |                  |   | 24,024    |  
|GOODWILL                                                                                                             |  |                   | 623,474   |                  |   | 608,427   |  
|OTHER INTANGIBLE ASSETS                                                                                              |  |                   | 190,807   |                  |   | 181,289   |  
|Less accumulated amortization                                                                                        |  |                   | 45,814    |                  |   | 31,774    |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|                                                                                                                     |  |                   | 768,467   |                  |   | 757,942   |  
|                                                                                                                     |  |                  
|OTHER ASSETS                                                                                                         |  |                   | 26,381    |                  |   | 20,556    |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|                                                                                                                     |  | $                 | 1,315,628 |                  | $ | 1,277,999 |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                 |  |                   |           |                  |   |           |  
|CURRENT LIABILITIES                                                                                                  |  |                   |           |                  |   |           |  
|Premiums payable to insurance companies                                                                              |  | $                 | 308,429   |                  | $ | 315,130   |  
|Accounts payable                                                                                                     |  |                   | 12,925    |                  |   | 13,417    |  
|Accrued expenses                                                                                                     |  |                   | 66,138    |                  |   | 46,371    |  
|Premium deposits and credits due customers                                                                           |  |                   | 47,949    |                  |   | 48,287    |  
|Current portion of long-term debt                                                                                    |  |                   | 12,540    |                  |   | 16,248    |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|TOTAL CURRENT LIABILITIES                                                                                            |  |                   | 447,981   |                  |   | 439,453   |  
|LONG-TERM DEBT                                                                                                       |  |                   | 260,471   |                  |   | 265,384   |  
|                                                                                                                     |  |                  
|DEFERRED INCOME TAXES                                                                                                |  |                   | 33,658    |                  |   | 34,113    |  
|                                                                                                                     |  |                  
|OTHER LONG-TERM LIABILITIES                                                                                          |  |                   | 49,008    |                  |   | 31,893    |  
|                                                                                                                     |  |                  
|SHAREHOLDERS EQUITY                                                                                                 |  |                   |           |                  |   |           |  
|Common Stock, no par value; authorized 100,000 shares; outstanding 35,774 and 35,886 shares, respectively            |  |                   | 226,635   |                  |   | 233,785   |  
|Retained earnings                                                                                                    |  |                   | 296,654   |                  |   | 271,978   |  
|Accumulated other comprehensive income (loss)                                                                        |  |                   |           |                  |   |           |  
|Unrealized gain (loss) on interest rate swaps, net of deferred tax (expense) benefit of $(289) and $120 respectively |  |                   | 434       |                  |   | (181      | )
|Foreign currency translation adjustments                                                                             |  |                   | 787       |                  |   | 1,574     |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|                                                                                                                     |  |                   | 524,510   |                  |   | 507,156   |  
|                                                                                                                     |  |                   |           |                  |   |           |  
|                                                                                                                     |  | $                 | 1,315,628 |                  | $ | 1,277,999 |  
|                                                                                                                     |  |                   |           |                  |   |           |  



See notes to
consolidated financial statements.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



STATEMENT OF CONSOLIDATED SHAREHOLDERS EQUITY

(UNAUDITED)



|                                                  |  |             |         |   |                  |   |         |                                            |  |   |       |  
|------------------------------------------------- |  | ----------- | ------- | - | ---------------- | - | ------- | ------------------------------------------ |  | - | ----- | -
|(in thousands, except per share amounts)          |  | CommonStock |         |   | RetainedEarnings |   |         | AccumulatedOtherComprehensiveIncome (Loss) | 
|Balance at January 1, 2005                        |  | $           | 233,785 |   |                  | $ | 271,978 |                                            |  | $ | 1,393 |  
|Issuance of 501 shares of Common Stock            |  |             | 12,835  |   |                  |   |         |                                            |  |   |       |  
|Repurchase of 613 shares of Common Stock          |  |             | (21,848 | ) |                  |   |         |                                            |  |   |       |  
|Income tax benefit from exercise of stock options |  |             | 1,863   |   |                  |   |         |                                            |  |   |       |  
|Payment of dividends ($0.3350 per share)          |  |             |         |   |                  |   | (12,001 | )                                          |  |   |       |  
|Derivative gain, net of tax                       |  |             |         |   |                  |   |         |                                            |  |   | 615   |  
|Foreign currency translation adjustments          |  |             |         |   |                  |   |         |                                            |  |   | (787  | )
|Net income                                        |  |             |         |   |                  |   | 36,677  |                                            |  |   |       |  
|                                                  |  |             |         |   |                  |   |         |                                            |  |   |       |  
|Balance at September 30, 2005                     |  | $           | 226,635 |   |                  | $ | 296,654 |                                            |  | $ | 1,221 |  
|                                                  |  |             |         |   |                  |   |         |                                            |  |   |       |  
|Balance at January 1, 2004                        |  | $           | 228,357 |   |                  | $ | 205,184 |                                            |  | $ | 726   |  
|Issuance of 982 shares of Common Stock            |  |             | 17,987  |   |                  |   |         |                                            |  |   |       |  
|Repurchase of 503 shares of Common Stock          |  |             | (17,300 | ) |                  |   |         |                                            |  |   |       |  
|Income tax benefit from exercise of stock options |  |             | 7,299   |   |                  |   |         |                                            |  |   |       |  
|Payment of dividends ($0.3025 per share)          |  |             |         |   |                  |   | (10,853 | )                                          |  |   |       |  
|Derivative gain, net of tax                       |  |             |         |   |                  |   |         |                                            |  |   | 233   |  
|Foreign currency translation adjustments          |  |             |         |   |                  |   |         |                                            |  |   | (67   | )
|Net income                                        |  |             |         |   |                  |   | 66,087  |                                            |  |   |       |  
|                                                  |  |             |         |   |                  |   |         |                                            |  |   |       |  
|Balance at September 30, 2004                     |  | $           | 236,343 |   |                  | $ | 260,418 |                                            |  | $ | 892   |  
|                                                  |  |             |         |   |                  |   |         |                                            |  |   |       |  





See notes to consolidated financial statements.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



STATEMENT OF CONSOLIDATED CASH FLOWS

(UNAUDITED)



|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                                                                                                                             |  | Nine Months EndedSeptember 30, |        
|(in thousands)                                                                                                                                                                               |  | 2005                           |         |   | 2004 |  
|OPERATING ACTIVITIES                                                                                                                                                                         |  |                                |         |   |      |   |         |  
|Net income                                                                                                                                                                                   |  | $                              | 36,677  |   |      | $ | 66,087  |  
|Adjustments to reconcile net income to net cash provided by operating activities:                                                                                                            |  |                                |         |   |      |   |         |  
|Regulatory charge and related costs                                                                                                                                                          |  |                                | 42,320  |   |      |   |        |  
|Severance charge                                                                                                                                                                             |  |                                | 1,303   |   |      |   |        |  
|Integration costs                                                                                                                                                                            |  |                                | 764     |   |      |   | 1,803   |  
|Depreciation                                                                                                                                                                                 |  |                                | 6,402   |   |      |   | 6,465   |  
|Amortization of intangibles                                                                                                                                                                  |  |                                | 14,197  |   |      |   | 9,125   |  
|Provision for losses on receivables                                                                                                                                                          |  |                                | 1,119   |   |      |   | 991     |  
|Provision for deferred income taxes                                                                                                                                                          |  |                                | (3,561  | ) |      |   | 3,675   |  
|Gain on sale of assets                                                                                                                                                                       |  |                                | (2,791  | ) |      |   | (560    | )
|Income tax benefit from exercise of stock options                                                                                                                                            |  |                                | 1,863   |   |      |   | 7,299   |  
|Changes in operating assets and liabilities net of effects from regulatory charge and related costs, severance charge, integration costs and
insurance agency acquisitions and dispositions: |  |                                |         |   |      |   |         |  
|Decrease in receivables                                                                                                                                                                      |  |                                | 2,445   |   |      |   | 17,133  |  
|Increase in prepaid expenses                                                                                                                                                                 |  |                                | (8,628  | ) |      |   | (9,261  | )
|Decrease in premiums payable to insurance companies                                                                                                                                          |  |                                | (8,956  | ) |      |   | (18,397 | )
|Increase (decrease) in premium deposits and credits due customers                                                                                                                            |  |                                | (337    | ) |      |   | 13,790  |  
|Decrease in accounts payable                                                                                                                                                                 |  |                                | (2,088  | ) |      |   | (388    | )
|Decrease in accrued expenses                                                                                                                                                                 |  |                                | (11,140 | ) |      |   | (12,043 | )
|Other operating activities                                                                                                                                                                   |  |                                | (71     | ) |      |   | 724     |  
|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  
|Net Cash Provided by Operating Activities                                                                                                                                                    |  |                                | 69,518  |   |      |   | 86,443  |  
|                                                                                                                                                                                             |  |                               
|INVESTING ACTIVITIES                                                                                                                                                                         |  |                                |         |   |      |   |         |  
|Purchase of property and equipment                                                                                                                                                           |  |                                | (7,365  | ) |      |   | (6,570  | )
|Purchase of insurance agencies, net of cash acquired                                                                                                                                         |  |                                | (19,281 | ) |      |   | (45,128 | )
|Proceeds from sale of assets                                                                                                                                                                 |  |                                | 5,183   |   |      |   | 4,872   |  
|Other investing activities                                                                                                                                                                   |  |                                | 536     |   |      |   | (478    | )
|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  
|Net Cash Used in Investing Activities                                                                                                                                                        |  |                                | (20,927 | ) |      |   | (47,304 | )
|                                                                                                                                                                                             |  |                               
|FINANCING ACTIVITIES                                                                                                                                                                         |  |                                |         |   |      |   |         |  
|Proceeds from long-term debt                                                                                                                                                                 |  |                                |        |   |      |   | 50,000  |  
|Principal payments on long-term debt                                                                                                                                                         |  |                                | (9,475  | ) |      |   | (5,419  | )
|Debt issuance costs                                                                                                                                                                          |  |                                | (204    | ) |      |   | (300    | )
|Repurchase of Common Stock                                                                                                                                                                   |  |                                | (21,848 | ) |      |   | (17,300 | )
|Proceeds from issuance of Common Stock, net of tax payments for options exercised                                                                                                            |  |                                | 4,255   |   |      |   | (374    | )
|Dividends                                                                                                                                                                                    |  |                                | (12,001 | ) |      |   | (10,853 | )
|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  
|Net Cash Provided by (Used in) by Financing Activities                                                                                                                                       |  |                                | (39,273 | ) |      |   | 15,754  |  
|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  
|Increase in cash and cash equivalents                                                                                                                                                        |  |                                | 9,318   |   |      |   | 54,893  |  
|Cash and cash equivalents at beginning of period                                                                                                                                             |  |                                | 210,470 |   |      |   | 126,464 |  
|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  
|Cash and cash equivalents at End of Period                                                                                                                                                   |  | $                              | 219,788 |   |      | $ | 181,357 |  
|                                                                                                                                                                                             |  |                                |         |   |      |   |         |  



See notes to
consolidated financial statements.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2005

(UNAUDITED)



NOTE ABASIS OF PRESENTATION



The accompanying unaudited consolidated financial statements of Hilb Rogal & Hobbs Company (the Company) have been prepared in accordance with
United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by
United States generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Operating results for the nine-month period ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Companys Form 10-K for the year ended December 31, 2004.



NOTE BACCOUNTING FOR STOCK-BASED COMPENSATION



The Company has three stock-based compensation plans. The Company continues to account for its stock options using the intrinsic value method prescribed
in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based compensation cost is reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the underlying common stock on the date of grant.



Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (Statement 123), as amended by Statement of Financial Accounting Standards No. 148, establishes
accounting and disclosure requirements using a fair value based method of accounting for stock options.



In December 2004, the Financial Accounting Standards Board issued Financial Accounting Standards Board Statement No. 123 (revised 2004),
Share-Based Payment (Statement 123R). Statement 123R revises Statement 123. The revised standard requires all companies to recognize compensation costs related to all share-based payments (including stock options) in their financial
statements at fair value, thereby, upon adoption, eliminating the use of pro forma disclosures to report such amounts. In April 2005, the Securities and Exchange Commission issued a rule to amend the effective date of Statement 123R. Statement 123R
is effective for a public company that is not a small business issuer at the beginning of the first fiscal year beginning after June 15, 2005.



Statement 123R permits public companies to account for the adoption of this revised standard using one of two methods: the modified-prospective method or
the modified-retrospective method. The modified-prospective method requires a company to recognize compensation based upon fair value for only those share-based awards granted with an effective date subsequent to the companys date of adoption
and share-based awards issued in prior periods that remain unvested at the date of adoption. The modified-retrospective method allows a company to restate, based upon pro forma amounts previously disclosed under the requirements of Statement 123,
for either all prior periods presented or prior interim periods included in the year of adoption.



The Company intends to adopt Statement 123R no later than January 1, 2006, but has yet to determine which of the two methods described above will be
utilized. The Company continues to evaluate the impact of this proposed statement on its financial position and results of operations.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



The following table illustrates the effect on net income and earnings per share if the Company had
applied the fair value recognition provisions of Statement 123 to stock-based compensation.



|                                                                                                                                   |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                   |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|(in thousands, except per share amounts)                                                                                           |  | 2005                            |        |   | 2004                           |   |        | 2005 |  |   | 2004   |  
|Net income (loss)as reported                                                                                                      |  | $                               | (6,848 | ) |                                | $ | 21,349 |      |  | $ | 36,677 |   |  | $ | 66,087 |  
|Deduct: Total stock-based compensation expense determined under fair value based method for all awards, net of related
tax effects |  |                                 | (1,519 | ) |                                |   | (1,447 | )    |  |   | (4,223 | ) |  |   | (4,103 | )
|                                                                                                                                   |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Pro forma net income (loss)                                                                                                        |  | $                               | (8,367 | ) |                                | $ | 19,902 |      |  | $ | 32,454 |   |  | $ | 61,984 |  
|                                                                                                                                   |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net income (loss) per share:                                                                                                       |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Basicas reported                                                                                                                  |  | $                               | (0.19  | ) |                                | $ | 0.60   |      |  | $ | 1.03   |   |  | $ | 1.85   |  
|Basicpro forma                                                                                                                    |  | $                               | (0.23  | ) |                                | $ | 0.55   |      |  | $ | 0.91   |   |  | $ | 1.73   |  
|                                                                                                                                   |  |                                 |        |  
|Assuming dilutionas reported                                                                                                      |  | $                               | (0.19  | ) |                                | $ | 0.58   |      |  | $ | 1.01   |   |  | $ | 1.81   |  
|Assuming dilutionpro forma                                                                                                        |  | $                               | (0.23  | ) |                                | $ | 0.55   |      |  | $ | 0.89   |   |  | $ | 1.70   |  



NOTE CINCOME TAXES



Deferred taxes result from temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Companys effective rate varies from the statutory rate primarily due to state income taxes and certain
non-deductible items in the regulatory charge.



NOTE DACQUISITIONS



During the first nine months of 2005, the Company
acquired certain assets and liabilities of four insurance agencies. These acquisitions, individually or in aggregate, were not material to the consolidated financial statements.



NOTE ESALE OF ASSETS AND OTHER GAINS



During the nine months ended September 30, 2005 and 2004, the Company sold certain insurance accounts and other assets resulting in gains of $2.8
million and $0.6 million, respectively. These amounts are included in other revenues in the Statement of Consolidated Income. Taxes related to these gains were $1.3 million and $0.2 million for the nine months ended September 30, 2005 and
2004, respectively. Revenues, expenses and assets related to these dispositions were not material to the consolidated financial statements.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



NOTE FNET INCOME (LOSS) PER SHARE



The following table sets forth the computation of basic and diluted net income (loss) per share:



|                                                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|-------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | ------------------------------ | ---- | - | ------ |  | ---- | ------ |  | - | ------
|                                                                                       |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|(in thousands, except per share amounts)                                               |  | 2005                            |        |                                | 2004 |   | 2005   |  | 2004
|Numerator for basic and diluted net income (loss) per share                            |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Net Income (Loss)                                                                      |  | $                               | (6,848 | )                              |      | $ | 21,349 |  | $    | 36,677 |  | $ | 66,087
|                                                                                       |  |                                 |        |                               
|Denominator                                                                            |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Weighted average shares                                                                |  |                                 | 35,446 |                                |      |   | 35,562 |  |      | 35,495 |  |   | 35,525
|Effect of guaranteed future shares to be issued in connection with agency acquisitions |  |                                 | 224    |                                |      |   | 310    |  |      | 260    |  |   | 268   
|                                                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Denominator for basic net income (loss) per share                                      |  |                                 | 35,670 |                                |      |   | 35,872 |  |      | 35,755 |  |   | 35,793
|Effect of dilutive securities:                                                         |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Employee stock options                                                                 |  |                                 |       |                                |      |   | 352    |  |      | 288    |  |   | 437   
|Employee non-vested stock                                                              |  |                                 |       |                                |      |   | 130    |  |      | 137    |  |   | 123   
|Contingent stockacquisitions                                                          |  |                                 |       |                                |      |   | 166    |  |      | 114    |  |   | 127   
|                                                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Dilutive potential common shares                                                       |  |                                 |       |                                |      |   | 648    |  |      | 539    |  |   | 687   
|                                                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Denominator for diluted net income (loss) per shareadjusted weighted average shares   |  |                                 | 35,670 |                                |      |   | 36,520 |  |      | 36,294 |  |   | 36,480
|                                                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Net Income (Loss) Per Share:                                                           |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Basic                                                                                  |  | $                               | (0.19  | )                              |      | $ | 0.60   |  | $    | 1.03   |  | $ | 1.85  
|Assuming Dilution1                                                                     |  | $                               | (0.19  | )                              |      | $ | 0.58   |  | $    | 1.01   |  | $ | 1.81  

---

|1 | For the three months ended September 30, 2005, dilutive securities are not included in the calculation of diluted net loss per share as this would be antidilutive.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



NOTE GSEVERANCE CHARGE



In May 2005, Robert B. Lockhart, the Companys former President and
Chief Operating Officer, resigned. In connection with Mr. Lockharts resignation, the Company recorded a severance charge of $1.3 million, and related income tax benefit of $0.5 million, representing estimated payments due to
Mr. Lockhart under the terms of his employment agreement.



NOTE
HINTEGRATION COSTS



The Company began the
integration of Hobbs Group, LLC (Hobbs) with the rest of the Company subsequent to June 30, 2003 with the completion of the Hobbs earn-out. The Company recognized integration costs of $0.8 million and $1.8 million and related income tax benefit
of $0.3 million and $0.7 million for the first nine months of 2005 and 2004, respectively. These amounts represent costs such as severance and other employee-related costs, facility and lease termination costs, and branding expenses.



NOTE IREGULATORY CHARGE AND RELATED MATTERS



The Company and certain other companies in the insurance intermediary
industry have been subject to investigations and inquiries by various governmental authorities regarding business practices and broker compensation arrangements. On August 31, 2005, the Company entered into an agreement (the Agreement) with the
Attorney General of the State of Connecticut (the Attorney General) and the Insurance Commissioner of the State of



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##### Table of Contents

HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



Connecticut (the Commissioner) to resolve all issues related to investigations conducted by the Attorney General and the Commissioner into certain insurance
brokerage and insurance agency practices (the Investigations) and to settle an action commenced on August 31, 2005 by the Attorney General in the Connecticut Superior Court alleging violations of the Connecticut Unfair Trade Practices Act and
the Connecticut Unfair Insurance Practices Act (the Action).



Following is a summary of the material terms of the Agreement:



| | 1. | The Company will pay $30.0 million into a fund (the Fund) in two installments to be distributed to certain eligible U.S. policyholder clients (the Affected Policyholders). These
payments are in full satisfaction of the Companys obligations under the Agreement and the Attorney General and the Commissioner have agreed not to impose any other financial obligation or liability on the Company related to the Investigations
and/or the Action, except for the fine as provided for in the Stipulation and Consent Order with the Commissioner (see below for additional detail). The Company is not permitted to seek or accept, directly or indirectly, indemnification for payments
made by the Company pursuant to the Agreement and the fine described below to the State of Connecticut Insurance Department. No portion of the payments by the Company for the Fund is considered a fine or penalty. The Company will make payments into
the Fund as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On or before February 1, 2006, the Company shall pay $20.0 million into the Fund,
| | - |  | ---------------------------------------------------------------------------------



| |  |  | On or before August 1, 2007, the Company shall pay $10.0 million into the Fund.
| | - |  | -------------------------------------------------------------------------------



| | 2. | The Fund, plus interest, will be used to compensate the Affected Policyholders according to procedures set forth in the Agreement.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------



| | 3. | Affected Policyholders are a) all Company U.S. brokerage business clients on whose insurance placements, renewals, consultations or service the Company was eligible to receive
Contingent Compensation (as defined in the Agreement) between January 1, 2001 and December 31, 2004 (the Broker Clients); b) all Company U.S. agency clients on whose insurance placements, renewals, consultations or service the Company was
eligible to receive Contingent Compensation pursuant to a National Override Agreement between January 1, 2001 and December 31, 2004 (the National Override Clients); and c) all Company U.S. agency clients, other than National Override
Clients, on whose insurance placements, renewals, consultations or service the Company was eligible to receive Contingent Compensation between January 1, 2001 and December 31, 2004 (the Agent Clients).
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Fund will be allocated $19.5 million between Broker Clients and National
Override Clients (the Broker/Override Fund) and $10.5 million to Agent Clients (the Agency Fund), and an Affected Policyholder arising from an acquisition by the Company after December 31, 2000 shall be included only as of the date of
acquisition by the Company.



National Override Agreements, as
defined in the Agreement, mean corporate-wide compensation agreements negotiated by the Company with those certain insurance companies on behalf of all of the Companys offices to receive commissions in lieu of standard contingent compensation
arrangements with each office of the Company.



| | 4. | By August 21, 2006, the Company will send notice to each client setting forth the amount it will be paid from the Fund if it elects to participate. Clients will have until
November 21, 2006 to make an election to receive distributions from the Fund.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | The Company will make distributions from the Fund on January 15, 2007 and, if necessary, January 15, 2008 to participating clients that elected to receive a distribution.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



| | 6. | 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 the Company to satisfy any pending or other claims of policyholders relating to the matters covered by the Agreement. The funds attributable to Non-Participating Policyholders also may be used to reimburse the Company
for any payments made to policyholders between September 1, 2005 and April 15, 2008 for claims related to this Agreement. In no event shall a distribution be made from the Fund to any Non-Participating Policyholder or as reimbursement to
the Company for prior payments to any Non-Participating Policyholder until all participating clients have been paid the full aggregate amount due, nor shall total payments to any Non-Participating Policyholder exceed 80% of that Non-Participating
Policyholders original allocated share. If any funds remain in the Fund as of April 15, 2008, such funds will be distributed pro rata to the participating policyholders and clients. In no event shall any of the monies in or from the Fund
be used to pay attorney fees.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | Within 60 days of executing the Agreement, the Company will undertake the implementation of certain business reforms for both brokerage business and agency business. These reforms
include:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | to not accept or request contingent compensation on brokerage business,
| | - |  | -----------------------------------------------------------------------



| |  |  | to make enhanced disclosures to clients regarding compensation and customer rights,
| | - |  | -----------------------------------------------------------------------------------



| |  |  | to accept certain types of compensation only after disclosing such compensation to a client,
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | to adopt additional corporate governance practices.
| | - |  | ---------------------------------------------------



In conjunction with executing the Agreement, the Company entered into a Stipulation and Consent Order with the Commissioner to resolve all issues relating
to the Commissioners investigation into the placement or attempted placement of professional liability insurance in Connecticut. Pursuant to the Stipulation and Consent Order, the Company paid an administrative fine of $250,000 to the State of
Connecticut Insurance Department. The cost of this fine is included in the 2005 third quarter regulatory charge of $42.3 million.



In the 2005 third quarter, the Company recorded a $42.3 million charge, and related income tax benefit of $16.0 million, primarily relating to the
Agreement with the Attorney General and the Commissioner. This charge includes the $30.0 million national fund established by the Agreement; $5.1 million of estimated legal and administrative costs to be incurred related to the Fund and complying
with the Agreements other provisions; and $1.4 million of legal costs relating to the Agreement incurred in the 2005 third quarter. The regulatory charge also includes $5.8 million of estimated costs for pending regulatory matters. These
estimated costs represent the Companys best estimate of the probable outcomes of the various pending regulatory matters and include related legal and administrative costs incurred or expected to be incurred for these regulatory matters.



The current liability portion of this charge as of September
30, 2005 is $30.1 million and is included in accrued expenses. The remaining liability is included in other long-term liabilities.



These pending regulatory matters relate to subpoenas and/or inquiries made by state attorneys general and insurance departments into, among other things,
the industrys commission payment practices. The Company has received subpoenas and/or requests for information from attorneys general and/or insurance departments in fourteen states. The Company may receive additional subpoenas and/or requests
for information in the future from attorneys general and/or insurance departments of other states. The Company will continue to evaluate and monitor all such subpoenas and requests.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



NOTE JCOMMITMENTS AND CONTINGENCIES



Industry Litigation



The Company has been named as a defendant in certain legal proceedings against brokers and insurers relating to broker compensation arrangements and other
business practices.



MDL 1663 Class Action



In August 2004, OptiCare Health Systems Inc. filed a putative class action
in the U.S. District Court for the Southern District of New York (Case No. 04-CV-06954) against a number of the countrys largest insurance brokers and several large commercial insurers. The Company was named as a defendant in the Opticare
suit in November 2004. In December 2004, two other purported class actions were filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, by Stephen Lewis (Case No. 04-C-7847) and Diane Preuss (Case
No. 04-C-7853), respectively, against certain insurance brokers, including the Company, and several large commercial insurers. On February 17, 2005, the Judicial Panel on Multidistrict Litigation (the Panel) ordered that the Opticare suit,
along with three other purported antitrust class actions filed in New York, New Jersey and Pennsylvania against industry participants, be centralized and transferred to the U.S. District Court for the District of New Jersey. In addition, by
Conditional Transfer Order dated March 10, 2005, the Panel conditionally transferred the Lewis and Preuss cases to the U.S. District Court for the District of New Jersey. As a result of the Panels transfer orders, the Opticare, Lewis and
Preuss cases are proceeding on a consolidated basis with other purported class action suits styled as In re: Insurance Brokerage Antitrust Litigation (MDL 1663).



On August 1, 2005, the plaintiffs in MDL 1663 filed a First Consolidated Amended Commercial Class Action Complaint (the
Commercial Complaint) in the United States District Court for the District of New Jersey (Civil No. 04-5184) against the Company and certain other insurance brokers and insurers. In the Commercial Complaint, the named plaintiffs purport to
represent a class consisting of all persons who, between August 26, 1994 and the date on which class certification may occur, engaged the services of any one of the broker defendants or any of their subsidiaries or affiliates to obtain advice
with respect to the procurement or renewal of insurance and who entered into or renewed a contract of insurance with one of the insurer defendants. The plaintiffs allege in the Commercial Complaint, among other things, that the broker defendants
engaged in improper steering of clients to the insurer defendants for the purpose of obtaining undisclosed additional compensation in the form of contingent commissions from insurers; that the defendants were engaged in a bid-rigging scheme
involving the submission of false and/or inflated bids from insurers to clients; that the broker defendants improperly placed their clients insurance business with insurers through related wholesale entities where an intermediary was
unnecessary for the purpose of generating additional commissions from insurers; that the broker defendants entered into unlawful tying arrangements to obtain reinsurance business from the defendant insurers; and that the defendants created
centralized internal departments for the purpose of monitoring, facilitating and advancing the collection of contingent commissions, payments and other improper fees. The plaintiffs allege violations of federal and state antitrust laws, violations
of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) and (d), fraudulent misrepresentation, breach of fiduciary duty, aiding and abetting breach of fiduciary duty and unjust enrichment. The plaintiff seeks monetary
relief, including treble damages, injunctive and declaratory relief, restitution, interest, attorneys fees and expenses, costs and other relief. The Company has not yet filed a responsive pleading in this case but believes it has substantial
defenses to these claims and intends to defend itself vigorously.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



In addition, the plaintiffs in MDL 1663 also filed on August 1, 2005 a First Consolidated
Amended Employee Benefits Class Action Complaint (the Employee Benefits Complaint) in the United States District Court for the District of New Jersey against the Company; Frank F. Haack & Associates, Inc.; ONeill, Finnegan & Jordan
Insurance Agency Inc.; and certain other insurance brokers and insurers. In the Employee Benefits Complaint (Civil Nos. 04-5184, et al.), the named plaintiffs purport to represent two separate classes consisting of ERISA and non-ERISA plan employees
and employers, respectively, that have acquired insurance products from the defendants in connection with an employee benefit plan between August 26, 1994 and the date on which class certification may occur. The plaintiffs allege in the
Employee Benefits Complaint, among other things, that the broker defendants secretly conspired with the insurer defendants to steer plaintiffs and members of the classes to the insurer defendants in exchange for undisclosed fees, including
communication fees, enrollment fees, service fees, finders fees and/or administrative fees, contingent commissions and other payments, including broker bonuses, trips and entertainment, from the insurer defendants; that the defendants were engaged
in a bid-rigging scheme involving the submission of false and/or inflated bids from insurers to clients; that the broker defendants improperly placed their clients insurance business with insurers through related wholesale entities where an
intermediary was unnecessary for the purpose of generating additional commissions from insurers; and that the defendants entered into unlawful tying arrangements under which the broker defendants would place primary insurance contracts with insurers
on the condition that the insurers use the broker defendants for placing their reinsurance coverage with reinsurance carriers. The plaintiffs allege violations of federal and state antitrust laws, violations of the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. § 1962(c) and (d), fraudulent misrepresentation, breach of fiduciary duty, aiding and abetting breach of fiduciary duty and unjust enrichment. The plaintiff seeks monetary relief, including treble and punitive
damages, injunctive and declaratory relief, restitution, interest, attorneys fees and expenses, costs and other relief. The Company has not yet filed a responsive pleading in this case but believes it has substantial defenses to these claims
and intends to defend itself vigorously.



Bensley Class Action



In May 2005, Bensley Construction, Inc. filed a
putative class action in the Superior Court of the Commonwealth of Massachusetts (Case No. ESCV2005-00277) against the Company and certain large commercial insurers and brokers. In the amended complaint, the plaintiff alleges, among other things,
that the broker defendants entered into contingent commission agreements with the insurer defendants without disclosing the existence and/or terms of the agreements to clients to whom the defendants owed a fiduciary duty and that certain of the
defendants engaged in a bid-rigging and customer allocation scheme to maximize their revenues under the contingent commission agreements. The plaintiff alleges breach of fiduciary duty, unjust enrichment, aiding and abetting breaches of fiduciary
duty, breach of contract and breach of implied covenant of good faith and fair dealing. The plaintiff seeks monetary damages for each member of the class in an amount not to exceed $74,999 per class member, costs and other relief. The defendants
removed the case to federal court and filed a notice to transfer the case to the U.S. District Court for the District of New Jersey pursuant to the Panel order referred to above. The Company believes it has substantial defenses to these claims and
intends to defend itself vigorously.



Securities Class Action



In June 2005, the Iron Workers Local 16 Pension Fund
filed a putative class action complaint in the United States District Court for the Eastern District of Virginia (Case No. 1:05-CV-00735-GBL-TCB) against the Company and Andrew L. Rogal, Martin L. Vaughan, III, Timothy J. Korman, Carolyn Jones,
Robert W. Blanton, Jr. and Robert B. Lockhart. The plaintiff alleged violations by each of the defendants of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and violations by the individual defendants of
Section 20(a) of the Securities Exchange Act of 1934.



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HILB ROGAL & HOBBS COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

September 30, 2005

(UNAUDITED)



In September 2005, the Iron Workers Local 16 Pension Fund was appointed Lead Plaintiff. In October
2005, Lead Plaintiff filed an amended putative class action complaint against the Company and Andrew L. Rogal, Martin L. Vaughan, III, Carolyn Jones and Robert B. Lockhart. Each of the individual defendants is a current or former officer and/or
director of the Company. In the amended complaint, the Lead Plaintiff alleges, among other things, that the defendants made false and misleading statements to the public in the Companys filings with the Securities and Exchange Commission,
press releases and other public statements between August 11, 2000 and May 26, 2005 by failing to disclose that the Companys contingent and override commissions were designed to allow the Company to steer its flow of business to those
insurance carriers that agreed to pay it such commissions; that the Companys business practices were in direct conflict of interest with its customers and were fraudulent and illegal; that the Companys business practices exposed the
Company to the risk of legal proceedings, reputational damage, and other harms; and that the Companys financial results were materially inflated as a result of the recognition of improper commissions as revenues.



The amended complaint further alleges that the individual defendants were
able to and did control the content of the Companys public statements as a result of their positions as officers and/or directors of the Company. The amended complaint alleges violations by each of the defendants of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and violations by the individual defendants of Section 20(a) of the Securities Exchange Act of 1934. The Lead Plaintiff seeks monetary damages, interest, costs, legal fees
and other relief. The Company believes it has substantial defenses to these claims and intends to defend itself vigorously.



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##### Table of Contents

|Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------



On September 29, 2005, the Companys Board of Directors appointed F. Michael Crowley as President of the Company
effective September 29, 2005. Previously, Mr. Crowley was Executive Vice President and National Director for Property and Casualty. Mr. Crowley succeeds Robert B. Lockhart, the Companys former President and Chief Operating
Officer, who resigned from the Company in May 2005. On October 4, 2005, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission regarding Mr. Crowleys appointment.



On September 13, 2005, the Companys Board of Directors appointed
Michael Dinkins as Executive Vice President and Chief Financial Officer of the Company effective October 1, 2005. Previously, Mr. Dinkins was Vice President-Global Control and Reengineering for Guidant Corporation. Mr. Dinkins
succeeds Carolyn Jones, the Companys former Senior Vice President, Chief Financial Officer and Treasurer, who announced in April 2005 her intention to retire from her position. On September 13, 2005, the Company filed a Current Report on
Form 8-K with the Securities and Exchange Commission regarding Mr. Dinkins appointment.



Results of Operations



Three
Months Ended September 30, 2005



Net income (loss)
for the three months ended September 30, 2005 was $(6.8) million, or $(0.19) per share, compared with $21.3 million, or $0.58 per share, for the comparable period last year. Net loss for the 2005 quarter included a regulatory charge and related
costs, net of tax, of $26.3 million, or $0.73 per share. This charge primarily relates to the Companys settlement with the Attorney General and the Insurance Commissioner of the State of Connecticut. The Connecticut settlement provides for a
$30 million national fund for distribution to HRHs U. S. clients who elect to participate in the fund. In addition, the charge includes amounts for the legal and administrative costs of complying with the settlement as well as estimated costs
for related pending regulatory matters. For additional information regarding this charge, see Note I-Regulatory Charge and Related Matters of Notes to Consolidated Financial Statements. Net income for the 2004 quarter included
integration costs, net of tax, of $0.1 million, or $0.01 per share. Integration costs relate to the continued integration of Hobbs Group, LLC. These represent costs such as severance and other employee-related costs, facility and lease termination
costs, and branding expenses. In addition, non-operating gains, net of tax, were $0.4 million and $51 thousand for the three months ended September 30, 2005 and 2004, respectively.



Commissions and fees were $161.1 million, an increase of 6.3%, from commissions and fees of $151.6 million during the
comparable period of the prior year. Approximately $14.2 million of the commissions was derived from acquisitions of new insurance agencies in 2005 and 2004. This increase was offset by decreases of approximately $3.2 million from the sale of
certain offices and accounts in 2005 and 2004. Excluding the effect of acquisitions and divestitures, the change in commissions and fees was (1.0)%. This decrease principally reflects a continued decline in property and casualty premium rates, the
termination of National Override Agreements and lower than normal retention rates primarily related to producer culling. National Override Agreements are defined in Note IRegulatory Charge and Related Matters of Notes to
Consolidated Financial Statements.



Expenses for the quarter
increased $56.1 million, or 47.5%. The 2005 quarter includes a regulatory charge of $42.3 million which is described above. Compensation and benefits and other operating expenses increased $9.3 million and $1.6 million, respectively. The increase in
compensation and benefits can be attributed to acquisitions of insurance agencies and continued investment in new sales and service talent. Other operating expenses increased mainly due to acquisitions partially offset by lower legal and claims
expenditures. Legal and claims expenditures decreased due to resolution of certain claims that were open during the 2004 third quarter.



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##### Table of Contents

Depreciation expense was relatively comparable to the prior year. Amortization of intangibles increased
approximately $1.3 million due primarily to intangible assets acquired in 2005 and 2004 acquisitions. Interest expense increased $1.8 million as average borrowings and interest rates increased between the quarters.



The Companys overall tax rates for the three months ended
September 30, 2005 and 2004, respectively, were 29.2% and 40.0%. The overall tax rate decreased from 2004 primarily due to certain non-deductible items in the 2005 regulatory charge.



Nine Months Ended September 30, 2005



Net income for the nine months ended September 30, 2005 decreased to $36.7 million, or $1.01 per share, from $66.1 million, or $1.81 per share,
for the prior year period. Net income for the nine-month period ended September 30, 2005, included a regulatory charge, net of tax, of $26.3 million, or $0.73 per share; a severance charge, net of tax, of $0.8 million, or $0.02 per share; and
integration costs, net of tax, of $0.5 million, or $0.01 per share. The regulatory charge and integration costs are consistent with those noted for the 2005 third quarter. The severance charge represents estimated payments due to the Companys
former President and Chief Operating Officer under the terms of his employment agreement. In addition, non-operating gains, net of tax, were $1.5 million or $0.04 per share, and $0.3 million, or $0.01 per share, for the nine months ended
September 30, 2005 and 2004, respectively.



Commissions
and fees for the nine months ended September 30, 2005 increased 10.2% to $499.8 million from $453.7 million during the prior year period. Acquisitions of new insurance agencies in 2005 and 2004 contributed commissions of $59.3 million. This
increase was offset by decreases of $8.1 million from the sale of certain offices and accounts in 2005 and 2004. Excluding the effect of acquisitions and divestitures, the change in commissions and fees was (1.1)%. This decrease principally reflects
the same factors noted for the quarter.



Expenses for the nine
months ended September 30, 2005 increased $97.6 million, or 27.9%, from the prior year period. For the 2005 nine-month period, expenses include a regulatory charge of $42.3 million and a severance charge of $1.3 million which are described
above. Integration costs decreased $1.0 million from the prior year. Other increases from the prior year were $30.3 million in compensation and benefits and $15.1 million in other operating expenses. Compensation and benefits increased primarily due
to acquisitions of insurance agencies and continued investment in new sales and service talent. Other operating expenses increased mainly due to increased legal, compliance and claims expenses and acquisitions. Legal, compliance and claims
expenditures increased $7.3 million due primarily to various regulatory inquiries and the protection of restrictive covenants in employment contracts as well as expenditures for compliance with Section 404 of the Sarbanes-Oxley Act. The $7.3
million increase is net of $4.2 million in insurance recoveries on contested claims.



Depreciation expense was comparable to the prior year. Amortization of intangibles increased approximately $5.1 million due primarily to intangible assets acquired in 2005 and 2004 acquisitions. Interest expense
increased $4.6 million as average borrowings and interest rates increased compared to the same period in the prior year.



The Companys overall tax rates for the nine months ended September 30, 2005 and 2004, respectively, were 41.6% and 40.0%. The overall tax rate
increased from 2004 primarily due to certain non-deductible items in the 2005 regulatory charge.



Other



For the three
months ended September 30, 2005, net income as a percentage of revenues declined from the three months ended June 30, 2005. This decline was primarily due to the regulatory charge recorded in the third quarter. In addition, commission
income increased $2.7 million or 1.7% between the two periods primarily as a result of the timing of new business and policy renewals partially offset by lower contingent commissions.



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The timing of contingent commissions, policy renewals and acquisitions may cause revenues, expenses and
net income to vary significantly from quarter to quarter. As a result of the factors described above, operating results for the nine months ended September 30, 2005 should not be considered indicative of the results that may be expected for the
entire year ending December 31, 2005.



Liquidity and Capital
Resources



Net cash provided by operations totaled
$69.5 million and $86.4 million for the nine months ended September 30, 2005 and 2004, respectively, and is primarily dependent upon the timing of the collection of insurance premiums from clients and payment of those premiums to the
appropriate insurance underwriters.



The Company has
historically generated sufficient funds internally to finance capital expenditures. Cash expenditures for the acquisition of property and equipment were $7.4 million and $6.6 million for the nine months ended September 30, 2005 and 2004,
respectively. The purchase of insurance agencies utilized cash of $19.3 million and $45.1 million in the nine months ended September 30, 2005 and 2004, respectively. Cash expenditures for such insurance agency acquisitions have been primarily
funded through operations and long-term borrowings. In addition, a portion of the purchase price in such acquisitions may be paid through the Companys Common Stock and/or deferred cash and Common Stock payments. The Company did not have any
material capital expenditure commitments as of September 30, 2005.



Financing activities utilized cash of $39.3 million and provided cash of $15.8 million for the nine months ended September 30, 2005 and 2004, respectively, as the Company repurchased Common Stock and made dividend and debt payments.
For 2004, these uses of cash were offset by 2004 borrowings against the Companys revolving credit facility to fund acquisitions. The Company has annually increased its dividend rate and anticipates the continuance of its dividend policy. The
Company repurchased 612,800 shares of its Common Stock for $21.8 million during the nine months ended September 30, 2005. The Company is currently authorized to purchase up to $50.0 million annually of its Common Stock subject to market
conditions and other factors.



As of September 30, 2005,
the Company has a credit agreement with outstanding term loans of $244.8 million, which are due in various amounts through 2011, and $174.6 million available under a revolving credit facility with no outstanding borrowings. Borrowings under the
credit agreement bear interest at variable rates based on LIBOR plus a negotiated spread. In September 2005, the Company amended the credit agreement to modify certain covenant requirements.



The Company has two interest rate swap agreements with a total notional
amount of $50.0 million. The Company uses these interest rate swaps to manage interest cost and cash flows associated with variable interest rates.



The Company had a current ratio (current assets to current liabilities) of 1.11 to 1.00 as of September 30, 2005. Shareholders equity of $524.5
million at September 30, 2005 is improved from $507.2 million at December 31, 2004. The debt to equity ratio at September 30, 2005 of 0.50 to 1.00 has decreased from the ratio at December 31, 2004 of 0.52 to 1.00 due to net
income and the issuance of Common Stock partially offset by share repurchases.



The Company believes that cash generated from operations, together with proceeds from borrowings, will provide sufficient funds to meet the Companys short and long-term funding needs.



Market Risk



The Company has variable rate debt, maintains certain investments and utilizes derivative financial instruments (on a
limited basis) which are subject to market risk; however, the Company believes that exposure to market risk associated with these instruments is not material.



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New Accounting Standards



In December 2004, the Financial Accounting Standards Board issued Financial Accounting Standards Board Statement No. 123
(revised 2004), Share-Based Payment (Statement 123R). Statement 123R revises Statement 123. The revised standard requires all companies to recognize compensation costs related to all share-based payments (including stock options) in
their financial statements at fair value, thereby, upon adoption, eliminating the use of pro forma disclosures to report such amounts. In April 2005, the Securities and Exchange Commission issued a rule to amend the effective date of Statement 123R.
Statement 123R is effective for a public company that is not a small business issuer at the beginning of the first fiscal year beginning after June 15, 2005.



Statement 123R permits public companies to account for the adoption of this revised standard using one of two methods: the modified-prospective method or
the modified-retrospective method. The modified-prospective method requires a company to recognize compensation based upon fair value for only those share-based awards granted with an effective date subsequent to the companys date of adoption
and share-based awards issued in prior periods that remain unvested at the date of adoption. The modified-retrospective method allows a company to restate, based upon pro forma amounts previously disclosed under the requirements of Statement 123,
for either all prior periods presented or prior interim periods included in the year of adoption.



The Company intends to adopt Statement 123R no later than January 1, 2006, but has yet to determine which of the two methods described above will be
utilized. The Company continues to evaluate the impact of this proposed statement on its financial position and results of operations.



Industry Regulatory Matters



On August 31, 2005, the Company entered into an agreement with the Attorney General of the State of Connecticut (the Attorney General) and the
Insurance Commissioner of the State of Connecticut (the Commissioner) to resolve all issues related to investigations conducted by the Attorney General and the Commissioner into certain insurance brokerage and insurance agency practices (the
Investigations) and to settle an action commenced on August 31, 2005 by the Attorney General in the Connecticut Superior Court alleging violations of the Connecticut Unfair Trade Practices Act and the Connecticut Unfair Insurance Practices Act.
For further information on this Agreement, see Note I-Regulatory Charge and Related Matters of Notes to Consolidated Financial Statements. Following is additional information regarding governmental investigations into the insurance
intermediary industrys business practices and broker compensation arrangements.



On October 14, 2004, the Office of the Attorney General of the State of New York (NYAG) filed a lawsuit against Marsh & McLennan Companies, Inc. and its subsidiary Marsh Inc. (collectively Marsh), the
worlds largest insurance broker, alleging statutory and common law fraud, securities fraud, bid-rigging and other antitrust violations in the placement of insurance business. On March 4, 2005, the NYAG filed a lawsuit against Aon
Corporation (Aon), the worlds second largest insurance broker, alleging fraudulent business practices, common law fraud and securities fraud in connection with the conduct of its placement of insurance business. Marsh and Aon have each
announced settlement agreements with the NYAG and certain state regulators. On April 8, 2005, Willis Group Holdings Limited, Willis North America Inc. and Willis of New York, Inc. (collectively Willis) entered into an agreement with the NYAG
and the New York state insurance regulator to resolve issues related to investigations of business practices conducted by the NYAG and the state regulator. On May 18, 2005, Arthur J. Gallagher & Co. and its subsidiaries and affiliates,
except for Gallagher Bassett Services, Inc., (collectively Gallagher), entered into an Assurance of Voluntary Compliance with the Attorney General of the State of Illinois and the Illinois state insurance regulator to resolve issues related to
investigations of business practices conducted by the Illinois regulators.



Under the terms of the agreements, Marsh, Aon, Willis and Gallagher are required to establish settlement funds in the amounts of $850 million, $190 million, $50 million and $27 million, respectively, to compensate
certain policyholder clients who retained Marsh, Aon, Willis or Gallagher to place insurance between specified inception or renewal dates, where such policies resulted in Marsh, Aon, Willis and Gallagher recording contingent or override commissions.
The Marsh, Aon, Willis and Gallagher agreements also place restrictions on the future business



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practices of these companies. Marsh, Aon, Willis and Gallagher may no longer accept (i) any contingent compensation for certain services in placing,
renewing, consulting on or servicing any insurance policy and (ii) any compensation other than a specific fee to be paid by the client, a specific percentage commission on premiums to be paid by the insurer set at the time of the purchase,
renewal, placement or servicing of the policy, or both types of compensation. If Marsh, Aon or Willis receives any commission, it must disclose to the client that it intends to collect the commission and obtain the clients written consent
prior to the binding of the policy.



A committee of the
Companys Board of Directors has been authorized to perform an independent review of the Companys business practices in the areas that were the subjects of the NYAGs allegations against Marsh. This committee has engaged outside
legal counsel to assist it in the review.



Contingent and National
Override Agreements Commissions



As a result of the
industry and regulatory developments described above, controversy continues to surround the longstanding insurance industry practice of contingent and override commissions paid to agents and brokers by underwriters. The Company has historically
entered into contingent and override commission agreements with various underwriters. Contingent commissions are commissions paid by underwriters based on profitability of the business, premium growth, total premium volume or some combination of
these factors. Revenue from contingent commissions is heavily weighted in the first and second quarters. Income from the National Override Agreements was typically volume-based and paid quarterly by underwriters in excess of the standard commission
rates on specific classes of business.



For the nine months
ended September 30, 2005 and 2004, the Company recognized contingent and National Override Agreements commissions of $47.6 million and $39.4 million, respectively. For the years ended December 31, 2004 and 2003, the Company recognized
$42.4 million and $40.8 million, respectively, in contingent and National Override Agreements commissions. Of the 2005 nine month amount, 93% was from standard contingency agreements and 7% was from National Override Agreements. Of the 2004 annual
amount, 81% was from standard contingency agreements and 19% was from National Override Agreements. The standard contingency agreements are maintained at the local office level. Effective for business written on or after January 1, 2005, these
National Override Agreements reverted into standard local contingency arrangements with those underwriters on an office by office basis, which will be paid and recorded, if at all, annually beginning in early 2006. There can be no assurance that the
loss of National Override Agreements commissions resulting from the reversion to standard local contingency arrangements will be offset by additional contingent commissions in future periods.



The departments of insurance of various states may adopt new regulations
addressing contingent commission arrangements and disclosure of such arrangements with insureds. In addition, the National Association of Insurance Commissioners has proposed model legislation to implement new disclosure requirements relating to
agent and broker compensation arrangements. The Company intends to monitor agent and broker compensation practices and, as warranted by market and regulatory developments, will review its compensation arrangements with underwriters. While it is not
possible to predict the outcome of the governmental inquiries and investigations into the insurance industrys commission payment practices or the responses by the market and regulators, any material decrease in the Companys contingent
commissions is likely to have an adverse effect on its results of operations.



In addition to state regulatory inquiries, the Company has been named as a defendant in four purported class actions brought against a number of brokers in the insurance industry and one purported securities class
action. For information on industry litigation, see Note JCommitments and Contingencies of Notes to Consolidated Financial Statements.



Forward-Looking Statements



The Company cautions readers that the foregoing discussion and analysis includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by that Act. These forward-looking statements are believed by the Company to



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be reasonable based upon managements current knowledge and assumptions about future events, but are subject to the uncertainties generally inherent in
any such forward-looking statement, including factors discussed above as well as other factors that may generally affect the Companys business, financial condition or operating results. Risk factors and uncertainties that might cause such a
difference include, but are not limited to, the following: the Companys commission revenues are highly dependent on premium rates charged by insurance underwriters, which are subject to fluctuation based on the prevailing economic conditions
and competitive factors that affect insurance underwriters; the level of contingent commissions is difficult to predict and any material decrease in the Companys collection of them is likely to have an adverse impact on operating results; the
Company has eliminated National Override Agreements commissions effective for business written on or after January 1, 2005, and it is uncertain whether additional contingent commissions payable to the Company will offset the loss of such revenues;
the Companys failure to recruit, retain, train and integrate quality producers may have an adverse effect on the Company; the Company may be subject to increasing costs arising from errors and omissions claims against the Company; the
Companys growth has been enhanced through acquisitions, which may or may not be available on acceptable terms in the future and which, if consummated, may or may not be advantageous to the Company; the Companys failure to integrate an
acquired insurance agency efficiently may have an adverse effect on the Company; the general level of economic activity can have a substantial impact on revenues that is difficult to predict; a strong economic period may not necessarily result in
higher revenues if the volume of insurance business brought about by favorable economic conditions is offset by premium rates that have declined in response to increased competitive conditions; a decline in the Companys ability to obtain new
financing and/or refinance current borrowings may adversely effect the Companys borrowing costs and financial flexibility; if the Company is unable to respond in a timely and cost-effective manner to rapid technological change in the insurance
intermediary industry, there may be a resulting adverse effect on business and operating results; the Company is subject to governmental regulation which may adversely impact operating results and/or growth; the business practices and broker
compensation arrangements of the Company and the insurance intermediary industry are subject to uncertainty due to investigations by various governmental authorities and related private litigation; costs incurred related to investigations, private
litigation and class actions are uncertain and difficult to predict; and quarterly and annual variations in the Companys commissions and fees that result from the timing of policy renewals and the net effect of new and lost business production
may have unexpected impacts on the Companys results of operations. For more details on factors that could affect expectations, see the Companys Annual Report on Form 10-K for the year ended December 31, 2004 and other reports from
time to time filed with or furnished to the Securities and Exchange Commission.



|Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|------- | -----------------------------------------------------------



The Company believes that its exposure to market risk associated with transactions using variable rate debt, certain investments and derivative financial
instruments is not material.



|Item 4. | CONTROLS AND PROCEDURES.
|------- | ------------------------



The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods required by the Securities and Exchange Commission. As of the end of the period covered
by this report on Form 10-Q, the Companys management, including the Chief Executive Officer and the Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of the Companys disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the Companys management, including the Chief Executive Officer and Chief Financial Officer,
concluded that the Companys disclosure controls and procedures were effective as of the end of such period. Management is also responsible for establishing and maintaining adequate internal control over the Companys financial reporting.
There have been no changes in the Companys internal control over financial reporting during the three months ended September 30, 2005, that have materially affected, or are reasonably likely to materially affect, the Companys
internal control over financial reporting.



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##### Table of Contents

PART IIOTHER INFORMATION



|Item 1. | LEGAL PROCEEDINGS.
|------- | ------------------



The information on legal proceedings contained in Note J-Commitments and Contingencies of the Notes to Consolidated Financial Statements filed
in Item 1 of Part I of this Form 10-Q is incorporated by reference.



|Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|------- | ------------------------------------------------------------



| | c) | No purchases of Common Stock occurred in the third quarter of 2005 under the publicly announced share-repurchase program (the 2004 Program).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------



The 2004 Program was announced by the Company on March 31, 2004 and
provides for the Company to purchase up to $50.0 million of its Common Stock annually. The repurchases may be made on the open market or in negotiated transactions, with the timing and amount of the transactions to be determined by the
Companys management subject to market conditions and other factors.



Not included in the 2004 Program are purchases that were made on behalf of a trust maintained by the Company for the Executive Voluntary Deferral Plan and the Outside Directors Deferral Plan. Total number of shares
purchased during the quarter relating to the plans was 7,140, at an average price per share of $34.08.



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##### Table of Contents

|Item 6. | EXHIBITS.
|------- | ---------



|            |  |                                                                                                                                                                                                                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                                            
|10.1        |  | First Amendment to Credit Agreement, dated September 29, 2005, among the Company, as Borrower; and Wachovia Bank, National Association, as administrative agent                                                                                                                                                                     
|            | 
|10.2        |  | 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 dated August 31, 2005 (incorporated by reference to Exhibit 10.1 to the Companys Form 8-K dated August 31, 2005, File No. 0-15981)
|            | 
|10.3        |  | Stipulation and Consent Order between the Insurance Commissioner of the State of Connecticut and Hilb Rogal & Hobbs Company and Hilb Rogal & Hobbs of Connecticut, LLC dated August 31,
2005 (incorporated by reference to Exhibit 10.2 to the Companys Form 8-K dated August 31, 2005, File No. 0-15981)                          
|            | 
|10.4        |  | Hilb Rogal & Hobbs Company Restricted Stock Agreement between the Company and Michael Dinkins, dated October 1, 2005                                                                                                                                                                                                                
|            | 
|10.5        |  | Hilb Rogal & Hobbs Company Employee Non-Qualified Stock Option Agreement between the Company and Michael Dinkins, dated October 1, 2005                                                                                                                                                                                             
|            | 
|31.1        |  | Certification Statement of Chief Executive Officer Pursuant to Rule 13a  14(a)/15d  14(a)                                                                                                                                                                                                                                         
|            | 
|31.2        |  | Certification Statement of Chief Financial Officer Pursuant to Rule 13a  14(a)/15d  14(a)                                                                                                                                                                                                                                         
|            | 
|32.1        |  | Certification Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                                               
|            | 
|32.2        |  | Certification Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                                               



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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 thereunto duly authorized.



|                      |  |  |  |                            |  |                               |  |                                                    
|--------------------- |  |  |  | -------------------------- |  | ----------------------------- |  | ---------------------------------------------------
|                      |  |  |  | Hilb Rogal & Hobbs Company
|                      |  |  |  | (Registrant)              
|                      |  |  | 
|Date November 4, 2005 |  |  |  | By:                        |  | /s/    MARTIN L. VAUGHAN,
III
|                      |  |  |  |                            |  |                               |  | Martin L. Vaughan, III                             
|                      |  |  |  |                            |  |                               |  | Chairman and Chief Executive Officer               
|                      |  |  |  |                            |  |                               |  | (Principal Executive Officer)                      
|                      |  |  | 
|Date November 4, 2005 |  |  |  | By:                        |  | /s/    MICHAEL DINKINS       
|                      |  |  |  |                            |  |                               |  | Michael Dinkins                                    
|                      |  |  |  |                            |  |                               |  | Executive Vice President andChief Financial Officer
|                      |  |  |  |                            |  |                               |  | (Principal Financial Officer)                      
|                      |  |  | 
|Date November 4, 2005 |  |  |  | By:                        |  | /s/    ROBERT W. BLANTON,
JR.
|                      |  |  |  |                            |  |                               |  | Robert W. Blanton, Jr.                             
|                      |  |  |  |                            |  |                               |  | Vice President and Controller                      
|                      |  |  |  |                            |  |                               |  | (Chief Accounting Officer)                         



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HILB ROGAL & HOBBS COMPANY



EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                                            
|10.1        |  | First Amendment to Credit Agreement, dated September 29, 2005, among the Company, as Borrower; and Wachovia Bank, National Association, as administrative agent                                                                                                                                                                     
|            | 
|10.2        |  | 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 dated August 31, 2005 (incorporated by reference to Exhibit 10.1 to the Companys Form 8-K dated August 31, 2005, File No. 0-15981)
|            | 
|10.3        |  | Stipulation and Consent Order between the Insurance Commissioner of the State of Connecticut and Hilb Rogal & Hobbs Company and Hilb Rogal & Hobbs of Connecticut, LLC dated
August 31, 2005 (incorporated by reference to Exhibit 10.2 to the Companys Form 8-K dated August 31, 2005, File No. 0-15981)                          
|            | 
|10.4        |  | Hilb Rogal & Hobbs Company Restricted Stock Agreement between the Company and Michael Dinkins, dated October 1, 2005                                                                                                                                                                                                                
|            | 
|10.5        |  | Hilb Rogal & Hobbs Company Employee Non-Qualified Stock Option Agreement between the Company and Michael Dinkins, dated October 1, 2005                                                                                                                                                                                             
|            | 
|31.1        |  | Certification Statement of Chief Executive Officer Pursuant to Rule 13a  14(a)/15d  14(a)                                                                                                                                                                                                                                         
|            | 
|31.2        |  | Certification Statement of Chief Financial Officer Pursuant to Rule 13a  14(a)/15d  14(a)                                                                                                                                                                                                                                         
|            | 
|32.1        |  | Certification Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                                               
|            | 
|32.2        |  | Certification Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350