Fort Walton Beach Council agenda — 05-22-2007 regular agenda — reading text

r.~ J ATTORNEY GENERAL Telephone ( 850) 414- 3855 I{/ Irr.s STATE OF FLORIDA Fax (850) 488- 9134 h C-.;:>'..",; 1'--::' u.. J. May 1, 2007 70: ~ 0" 01 ~ 1,.:; l~ 0' <, ;%' J' .~. --- City of Fort Walton Beach-- PO Box 4009 Ft. Walton Beach, FL 32549 4, , v~~~"'- /;' n 1-<<...:').,'/ I 1"i) '~~:~.._.'..'.'..... M nn_ Dear Sir or Madam, Q-" -"'~ ,!}./ CZ;'S;..;.~. ":),~;;// The Florida Attorney General, along with the Florida Department of Financia- I-- 3'eiVices and the Office of Insurance Regulation, entered into a settlement agreement with Brown & Brown, Inc. in December 2006. A copy of the settlement agreement is avaUable at http:// mvfloridalegal.comJ webfiles.nsf/WF /MRA Y -6WASVD/$ file/ Brown& Brown settlement.pdf As part of the settlement agreement, Brown & Brown, Inc. has agreed to pay $ 1, 800, 000. 00 to its Florida governmental entity customers. I understand that your organization was a customer of Brown & Brown, Inc. at some point between 1998 and 2005, thus your entity is entitled to share in this money if it signs a release. A copy ofthe release ( Exhibit " A") is enclosed for your review. By signing the release and accepting the settlement amountl reflected in Exhibit " A," your organization will waive any claims it may have concerning Brown / k- Brown' s receipt of undisclosed compensation from insurers. Please feel free to consult with your own attorney before deciding whether to accept the settlement amount, as this office cannot offer any legal advice. I have provided a self-addressed, stamped envelope for you to return the executed Exhibit " A" or inform our office of your decision to not accept the settlement amount. I need to hear from you by no later than May 25, 2007. Please feel free to call me if you have any questions. Sincerely, q;LR~ Laura Daugherty Enclosures 1 We have utilized Brown & Brown, Inc. data for the premiums paid by its Florida governmental entity policyholders during the relevant time period to determine the pro rata share of the $ 1, 800, 000,00 for each governmental entity.  EXIDBIT A RELEASE BACKGROUND: Byviitue. of a settlement, Brown & Brown, I:qc. (" Bro:wn") has paid a' SU111 fOfuthe benefit of its Horida; gb:v~ mmeIltal,entity policyhoI~er cliynt~ t().resolve. the oLmone)'. the lBY.~stig,~tion ,~9t1~ Hctedjqint1y 1;Jx FIQri4~ P~t?~~JJJ qf,fin, 3Jl(; i< l!$ el}'ice~ G;P:~ art~ ynt"); tp.e Flpn4~iDepatiirieJit Qf.tegillAffarrs~ Qffi?e :'Q( t~~ Att<? fri,eYGetieral,~ d. iheoffiC'e pf'hisllranceiIis>> Reglll~i~ ol iegi<fdl1 g uIi~#sd9'sed cOripens<iHbli " alJege4~y' r~c~ ive<i. by .I3rOWn from. r~r~ on accoUrtts~suchaS\ YouTs:. .. I3ro-wn~has' admitted nb, Wrongdoirigoy..liability infue .settlenient. :Please he a4Vis~(Fm~f,ohiy'tlios~J< iorid:J. goven1n1ental'~ J). dty p~1idyhbldel"clients wb()'~ x~ctitethis Release are entit1edt6recelvepaYineritsUn'derthe' s~ tt1eIrient. .. . . . RELEASE: Fo~ atld ip:Cotl~, , ic! e!:~~ i9P: o( t]1e, approJ\i!l! at~ su111 of ~. 4,4~~.09,:,and q! h~r,gggQ 4nd.. val1i~ble': cC;Ji~ideriitionjl1 J~aii4. pMd 1:> y' . ' ~ .' y .BroWn. ' t o .th~. Depai-tDJ~ Jj( f6rAistriblition' to tlie J.. .' . " < . ..' ." , '. '. ,_ ,.' "_ . .'." , ", . , . "":'. '".' _, . "," ' '.' ., >'. . Releasor; t1i~ R,el~as6t xMutlng thisI{~ ypYc(;; 16aseJ6tit~~ lfandi:.ts iesp~ectiYediVi# on~".subdivislQtls; ny' whid{ R~ acti'& dJ.a~ ~gainstarowndrcwhichjt~" fth~d, or wh~ddreiyaSbr' s, succesSors. leaSbrno\\ or' ~ssignlbere~fterc~, shatf~i'n:laY ha'Ver~ gardingBrowri"sreceiptof tindisc~Qs,~d tbIfipdri~atioh fromills1irerstmough the date of theexecuHonofthi~ Release. Releasor acknowledges that, in c making this Telease, Brown dOes 110t admit any l,iability to Releasor. ,. . IN WITNESS WIIEREOF, the, undersigned has caused ,this RELEASE.to .be, executed 2007. . RELEASOR: Public Entity: TaxID#: Mailing Address: Title: Signature: Print Name: L~" ,. SETTLEMENT AGREEMENT This Settlement Agreement (" Agreement") is entered into by and between the Florida Department of Financial Services (" Department"), the Florida Department of Legal Affairs, Office of the Attorney General (" Attorney General"), the Office of Insurance Regulation aIR"), and Brown & Brown, Inc. (" Brown") ( collectively, the " Parties"). WHEREAS: A. The Department and aIR each has regulatory jurisdiction over the insurance industry in Florida; B. The Attorney General has authority under state and federal law to investigate and prosecute potential antitrust violations as well as violations of state laws relating to certain business practices; C. In their respective capacities, the Department, the Attorney General, and aIR have undertaken a two- year joint investigation of the insurance brokering business in Florida as a result of reports of Undisclosed Compensation ( as defined herein) ( the " Investigation"); D. As part of the Investigation, the Department, the Attorney General, and aIR have collected and reviewed numerous documents and have interviewed many witnesses; E. The Department, the Attorney General, and OIR allege that Brown, since at least 2000, has received Undisclosed Compensation ( as defined herein) in connection with the placement of insurance coverage on behalf of certain Florida policyholders; F. Brown denies any wrongdoing but desires to resolve this Investigation to avoid the further expense and burden of a protracted investigation or litigation; and, G. The Parties agree that this Agreement is a fair and reasonable resolution of the Investigation.  NOW, THEREFORE, the Parties agree as follows: I. DEFINITIONS 1. " Brown" shall mean Brown & Brown, Inc., and any and all of its successors in interest and assigns, subsidiaries ( including but not limited to Program Management Services, Inc. or " PMSI") and any and all of their successors in interest and assigns, and affiliates as defined in Rule 240. 13e- 3 of the Rules and Regulations under the Securities Exchange Act of 1934. 2. " Compensation" shall mean any form of remuneration, recompense, or benefit of more than $ 500. 00 in amount or value. 3. " Contingent Compensation" shall mean any Compensation paid to Brown by an insurer that is contingent upon Brown: ( a) placing a particular number of policies or dollar value of premium with that insurer; (b) achieving a particular level of growth in the number of policies placed or dollar value of premium with that insurer; ( c) meeting a particular rate of retention or renewal of policies in force with that insurer; ( d) placing or keeping sufficient insurance business with that insurer to achieve a particular loss ratio or any other measure of profitability; or ( e) obtaining anything else for that insurer having a value of more than $ 500. 00. 4. " Undisclosed Compensation" shall mean any form of Compensation, including but not limited to Contingent Compensation, which was not specifically and explicitly disclosed to the policyholder prior to the binding of coverage for that policyholder. II. GENERAL PROVISIONS 5. Within ten ( 10) days of the execution of this Agreement: (a) PMSI shall payor cause to be paid to the Department, the Attorney General, and OIR the sum of $3, 000, 000. 00 to be distributed in the public interest, directly to the