Posted on 15 Sep 2009
The third-largest insurance broker, Willis Group Holdings Ltd., agreed to pay CNA Financial Corp. $130 million to resolve a legal dispute tied to reinsurance.
Willis expects to be covered by an insurance policy it purchased to recover costs tied to legal disputes, and the agreement includes no admission of wrongdoing, the London- based broker said yesterday in a regulatory filing. Willis will make two payments to CNA by Dec. 23, the company said.
Willis agreed in June to pay Assurant Inc. $139 million after an Assurant unit sued the broker in September 2007. Assurant and CNA alleged that a Willis employee was negligent with the placement of accident reinsurance, Willis said in a filing.
The settlement will increase CNA’s third-quarter operating results by about $60 million after taxes, the company said in a separate filing. CNA is controlled by Loews Corp.
Willis recorded a $125 million charge tied to the CNA claim in the second quarter. The remaining $5 million will be reflected in the third quarter, Willis said.