Title: IN7 Contingency Commission Settlement with Arthur J. Gallagher & Co.

Recommendation:

I recommend that the School Board approve the Contingency Commission Settlement Agreement with our Broker Arthur J. Gallagher & Company (AJG) for $7,842.37 to be returned to the District.

Description:

§         AJG, the property insurance broker for the District, received contingent commissions (additional commissions for placing more business with an insurer) from January 1, 2002 through December 31, 2004.

§         The State of Illinois and AJG reached an agreement to return 31.75% of these contingent commissions to the eligible policyholders involved.

§         By accepting the terms of the agreement, the District must release AJG from any future claims related to this issue.  An Independent Insurance Consulting Firm (Siver) has reviewed this agreement for two other Florida School Districts (Miami Date & Broward) and has found the terms of the agreement appropriate.

§         In their review, Siver indicates they are “not aware of any information which would indicate that Gallagher’s prior practices with respect to contingency commissions in connection with services provided to the School Board were either inconsistent with typical insurance industry practices, or resulted in harm to the School Board.”

Financial Impact:
The financial impact to the District is a recovery of $7,842.37.  The funds will be returned to the General Funds budget for insurance premiums.

For Additional Information, contact:

Joseph M. Moore(moorej@palmbeach.k12.fl.us)Dianne L. Howard