ITASCA, Ill., Dec. 29 /PRNewswire-FirstCall/ -- Arthur J. Gallagher & Co.
(NYSE: AJG) announced today that it has agreed to resolve all claims in the
Federal Multi-District (MDL) class action pending in the New Jersey Federal
District Court against commercial insurers and brokers relating to
industry-wide contingent commission matters. Gallagher admitted no
wrongdoing, but said it chose to conclude its involvement, rather than prolong
what could be a costly and burdensome lawsuit. Gallagher established a
provision for this matter in 2005, and as a result, substantially all of the
costs associated with the MDL settlement have been reserved for in its
previously reported balance sheet. Gallagher will incur a pretax charge in
its fourth quarter 2006 earnings of between $5.0 million to $10.0 million to
increase its reserve for the costs to be incurred to administratively conclude
the MDL settlement and to resolve other regulatory and civil litigation
matters.
The settlement, which is subject to court approval, provides for Gallagher
to distribute $28.0 million to current and former clients and others that used
a broker to purchase retail insurance from 1994 to 2005. The company will
also pay $8.85 million in plaintiff's attorney fees.
"We are pleased to put this legal matter behind us so we can focus all of
our efforts on doing what we do best -- providing our clients with
high-quality, cost-effective insurance and risk management services," said J.
Patrick Gallagher, Jr., Chairman, President and CEO.
Arthur J. Gallagher & Co., an international insurance brokerage and risk
management services firm, is headquartered in Itasca, Illinois, has operations
in seven countries and does business in 120 countries around the world through
a network of correspondent brokers and consultants. Gallagher is traded on the
New York Stock Exchange under the symbol AJG.
This press release may contain certain forward-looking statements relating
to future results. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those expected, depending on a
variety of factors such as changes in worldwide and national economic
conditions, changes in premium rates and in insurance markets generally and
changes in securities and fixed income markets as well as developments in the
areas of tax legislation and crude oil prices. Please refer to our filings
with the Securities and Exchange Commission, including Item 1, "Business --
Information Concerning Forward-Looking Statements" and Item 1A, "Risk
Factors," of our Annual Report on Form 10-K, for a more detailed discussion of
these factors.
SOURCE Arthur J. Gallagher & Co.
-0- 12/29/2006
/CONTACT: Marsha J. Akin, Investor Relations, of Arthur J. Gallagher &
Co., +1-630-773-3800/
/Web site: http://www.ajg.com /
(AJG)
CO: Arthur J. Gallagher & Co.
ST: Illinois
IN: FIN INS
SU: LAW
SA-AM
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0502 12/29/2006 16:30 EST http://www.prnewswire.com