Settlement Agreements – Questions and Answers
If you are not pleading guilty or admitting to liability, why are you agreeing to these large payments?
Zurich is not admitting to a violation of or liability under federal or state law of any kind. We are committed to our standards of responsibility and integrity, and to bringing certainty and greater transparency to the quoting process for our customers and producers in the United States. Zurich believes that it is in the best interests of our business, our producers, our employees, and, most importantly, our customers, to resolve these matters in this way at this
What impact will these settlements have on Zurich's financial results or its underlying financial strength?
Does the multi-state agreement address all outstanding disclosure of broker compensation investigations with the participating states, or might Zurich be subject to future legal or regulatory actions on those issues by the states participating in the multi-state agreement? time, and to cooperate with state officials rather than possibly engage in costly, protracted or acrimonious disputes or litigation.
Zurich is a financially strong organization. We do not anticipate that the costs associated with these announced settlements will have a significant impact on our overall financial strength or that such costs are likely to affect our ratings.
The agreements with the multi-state group cover all of the acts, practices or courses of conduct that are addressed in the class action claims or that were investigated by the states that signed the multi-state agreement. This covers allegations that relate to nondisclosure of contingent or other compensation paid to brokers or producers, and other matters
How do I find out if I will be receiving money from this settlement?
What are the specifics of the broker compensation disclosure such as purported bid-rigging. We are not aware of significant
"broker compensation issues" that we have with the settling state entities and which would not be addressed.
Upon execution of the settlements, the signing state entities will terminate and agree not to reinstate all current investigations, inquiries, claims and/or proceedings related to
Zurich, its directors, officers and employees, and they will not initiate any new investigations or proceedings related to these matters.
Until Zurich negotiates a final settlement agreement with the class action plaintiffs, the attorneys general review the plan for allocating the settlement, and the class action settlement is approved by the court, we will not know who will be eligible to receive restitution, or the timing or mechanics for the distribution of the restitution funds.
The mechanism by which policyholders will learn whether they are eligible for restitution is through a court-approved Class
Action Notice that will be provided to the settlement class members. Before that can happen, Zurich must first finalize a settlement with the class action plaintiffs and present the
Notice to the court for approval. No money will be paid out before court approval of the settlement.
Under the terms of the Regulatory Settlement Agreement which has already been endorsed by at least five state
1

practices mandated by the
Regulatory Settlement
Agreement?
How will this disclosure be made?
When will this new disclosure process start?
Will the changes in how Zurich does business under these settlements be good for
Zurich's customers, brokers and agents?
Are there investigations by other state and regulatory authorities that are not resolved by these settlements? departments of insurance, and which the National Association of Insurance Commissioners’ Broker Activities Task Force supports as a sound regulatory framework, Zurich agrees to require its U.S. brokers and agents to undertake pre-binding written disclosure to inform commercial customers of the company's compensation arrangements.
The disclosure will cover compensation from Zurich to brokers and agents on both new and renewal business, and will provide information on both base and contingent compensation. This disclosure, however, will not state the exact amount of broker compensation per policy, which is not always knowable before binding. To determine that amount, a policyholder or prospect must talk directly with the broker or agent, as is the current practice.
The disclosure will take the form of a written summary substantially in the form of "Exhibit A” to the settlement agreements, a notice that will be provided to brokers and agents with each Zurich quote. Based on the type of policy, this summary will outline base compensation amounts and ranges of applicable contingent compensation for brokers who may be eligible. This form will also reference a Zurich Web site and toll-free telephone number providing more information that describes ranges of base compensation payable on types of policies, and more details regarding the formula and payment of contingent compensation.
Zurich has 180 days from the signing of the settlements with the state attorneys general and regulators to implement the compensation disclosure provisions.
Yes. Zurich believes strongly that the transparency required by these settlements, whereby brokers and agents will inform customers of the company's compensation arrangements, is in the best interests of our brokers, agents and customers.
The National Association of Insurance Commissioners’ Broker
Activities Task Force supports the Regulatory Settlement as sound regulatory policy and as providing significant new benefits to consumers. We have the utmost confidence in the ultimate professionalism of our producers. We believe that Zurich's attractive overall package of price, product, service and financial strength should keep brokers, agents and customers eager to continue doing business with Zurich as changes are implemented.
Yes, there are other state and regulatory authorities with ongoing investigations. Zurich will continue to cooperate fully with those investigations and is engaged in negotiations with other state legal and regulatory authorities.
# # #
2