HomeMy WebLinkAboutReso 2007-1118
RESOLUTION NO. 2007- 11 \ <:2
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
SUNNY ISLES BEACH, FLORIDA, ("CITY") RATIFYING A
RELEASE BETWEEN THE CITY AND BROWN & BROWN, INC.
("BROWN") AUTHORIZING THE CITY TO RECEIVE PAYMENT
IN THE AMOUNT OF $27,960.13 ATTACHED HERETO AS
EXHIBIT "A"; AUTHORIZING THE CITY ATTORNEY AND THE
CITY MANAGER TO DO ALL THINGS NECESSARY TO
EFFECTUATE THE INTENT OF THIS RESOLUTION; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the Florida Department of Financial Services ("Department"), the Florida
Department of Legal Affairs, Office ("Attorney General") and the Office of Insurance
Regulation ("OIR"), undertook a two year joint investigation of the insurance brokerage business
in Florida as a result of reports of undisclosed compensation; and
WHEREAS, the Department, the Attorney General and OIR alleged that Brown & Brown,
Inc. ("Brown"), since at least 2000, has received undisclosed compensation in connection with
the placement of insurance coverage on behalf of certain Florida policyholders, including the
City of Sunny Isles Beach, Florida, ("City"); and
WHEREAS, Brown denied any wrongdoing but desired to avoid the further expense and
burden of a protracted investigation or litigation; and
WHEREAS, the Department, the Attorney General, OIR and Brown collectively entered
into a Settlement Agreement, whereby Brown agreed to pay $3 million directly to the Preferred
Governmental Insurance Trust, $1,8 million for the benefit of other Florida governmental entity
policyholders of Brown (including the City), and $1 million in attorney's fees and costs to the
Department, the Attorney General and OIR; and
WHEREAS, Brown further agreed to utilize certain compensation disclosure forms for all
future insurance proposals; and
WHEREAS, Brown's Florida governmental entity policyholders who cxecute a Release are
entitled to receive payments under the Settlement Agreement; and
WHEREAS, the Attorney General's Office has advised that the City is entitled to receive
payment in the amount of$27,960.13 pursuant to the Settlement Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY
OF SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS:
Section I. Ratification of Release. The City Commission hereby ratifies the Relcase
between the City and Brown attached hereto as Exhibit "A".
Section 2, Authorization of the City Attorney and the City Manager. The City Attorney
and the City Manager are hereby authorized to do all things necessary to effectuate the intent of
this Resolution.
Section 3.
Effective Date. This Resolution shall become effective upon adoption,
ATTEST:
'c-Jtl'~ ~'tA~
Jane A. I'lines, C C, City Clerk
APPRO;VJll AS TO FORM
AND ~G ' SUFFICIENCY:
Moved by: '.[, U vY\tUjlY" Tl:l~
Seconded by: ChlY\W\\SS\llI\)TA? &~L2IN
Vote: 6-0
Mayor Edelcup
Vice Mayor Thaler
Commissioner I3rezin
Commissioner Goodman
Commissioner Iglesias
~(Yes)
V (Yes)
t::(Yes)
~Yes)
(Yes)
(No)
(No)
(No)
_(No)
_(No)
2
;'
~/.
FXIIIBlT A
RELEASE
BACKGROUND: By virtue of a settlement, Brown & Brown, Inc, ("Brown") has paid a
sum of money for the benefit of its Florida governmental entity policyholder clients to resolve the
investigation conducted jointly by the Florida Department of Financial Services ("Department"), the
Florida Department of Legal Affairs, Office of the Attorney General, and the Office of Insurance
Regulation regarding undisclosed compensation allegedly received by Brown from insurers on
accounts such as yours. Brown has admitted no wrongdoing or liability in the settlement. Please be
advised that only those Florida governmental entity policyholder clients who execute this Release are
entitled to receive payments under the settlement.
'RELEASE: For and in consideration of the approximate sum of $27,960.13, and other
good and valuable consideration in hand paid by Brown to the Department for distribution to the
Releasor, the Releasor, by executing this Release for itself and its respective divisions, subdivisions,
officials, officers, executors, attorneys, administrators, agents, successors, and assigns, hereby
waives, releases, remises, forgives, acquits, and forever discharges Brown, including any parent,
subsidiary, or affiliated company of Brown (expressly including, but not limited to Program
Management Services, Inc. ["PMSI"]), and their respective predecessors, successors, assigns,
fonner and current officers, directors, agents, representatives, officials, attorneys, and employees of
and from all manner of actions, cause and causes of action, suits, damages, whether compensatory,
consequential or punitive, awards, claims, demands, and judgments whatsoever, whether sounding
in contract, quasi-contract or tort, in law or in equity, or any right of participation in any class
action, which Releasor now has against Brown or which it ever had, or which Releasor's successors
or assigns hereafter can, shall or may have regarding Brown's receipt of undisclosed compensation
from insurers through the date of the execution of this Release. Releasor acknowledges that, in
making this release, Brown does not admit any liability to Releasor.
IN WITNESS WHEREOF,
H~ ~l
the undersigned has caused this RELEASE to be executed
,2007.
RELEASOR:
Public Entity:
City of Sunny Isles Beach
Tax ID#:
650 78 4647
Mailing Address: 18070 Collins Avenue, Sunny Isles Beach, Fl 33160
Title:
Assistant City Manager - Finance
Signature:
..4 Wll~.,
Print Name:
Douglas M. Haag
!"'ij':
~.....J'
Nolo<y Publlc Slole 01 Florida
Priscilla Tyler Walker
My Commission DD54a519
Expires 07l14/2Q10
~<!A-w.:cr: c.
'-.. , .. -- (~
~
EXHIBIT "A"
SETTI,E,\IE\T ,,\(;REE\lI'SI'
This Settlemcnt :\grcc1l1cllt (";\grL'L'llll'lll") i:-; elltered illll) hy Hnd h\.'I\\Tl'll the Florida
IlCl'al'lll1Cnl uC !-'inaneial Sell ice, ("\)cpalll11eni"), Ih,' l'lmida 1),'parll11cl1l ul' Lc~al /\f!i,ir"
OniCL' of the Attorney (;cllcl"<l1 ("Atturney (icllcr,d"), tilL' Orlicc or Insurance RL'gulatiun
("01""), ami Brown &. Ilrown, Ine, ("Ilrown") (wllceli"ely, Ihe "Pal'lie,'),
WIII:I(I:i\S:
:\. rilL' I kp1ll'1 IllCll I <llld 01 R l'<lch Iw;.; regulatory jUl'isdil'liull (l\ CI" llll' Illsurance
induslry in Florida:
B. The l\ltOnley Gelleral has <luthority LInder slalL' ,lIltl Cederul liI\\' to investigate Hnd
prOSL'Clllt: potcntial antitrust \"iobtiullS as well as \'ioliltions or slale laws rdating In certaill
husillL's.'i pr<lcliu.:s:
(' In Iheir re'pcclil'l' capacillc', Ihc Ilepal'llllenl. Ih,' ,<\lItlroe'Y (;Clll'l'al. allll Oll{
have 1I1l(iL'r1akl'll a two-year .iuin\ 11l\\:stigalilll1 or thl' inSUl'aIlCL' brokL'ring hllSilll'SS in I-"lorida
as a 1\:SUIt orn:purls orlJlldisclosl,:d ('olllpCnSiltioll (liS ddillL'd IlL'rein) (the Ulm'cstigillioll"):
D, /\S pan orlhe Investigatioll, the I)cPilrtlllClll,lhe t\\tOJ'llcy (jelleral, <Jnd OIl{ ha\"t.:
colkcled and rcvicwed l1umerous documenls and h,IH' inlL'rvic\\'cd Ill:lny \\'illlL'SSCS:
F. rile DeparllllCnl, the /\llOI"llL'Y (jellL'r:lI, :llld (HI( alk~l' lhat Iht)\\ll. 'ilIlCL' ill least
2000, hils rL'cL'i\'cd l.:lldisclllsL'd C'OlllpL'll:-.alioll (as del"lllL'd !lcn:'ill) ill COllllL'clioll \\1111 lhL'
plaCcllll'llt of insurallce CO\'L'rage 011 bellal!' or ccrtain Florida pulicyllOlders:
F Ilrowll dCllie, '1I1\' IIT(lI,~d()lll~ b(ll de,ire, 1(1 resolle' Ihi, IIlI'c'li~ali,," 10 avoid
llll' t"urthL'r cxpcllse and htlrdl'll 01',\ prutrllctL'd illvcstigalioll Ol" liliglltion: and.
(i. Till' Partics agr\"'c lhlll this :\grl'L'IllCnl is iI lilir alld 1\.'ilSOllilhlc rcsOIUlilH1 of tilL'
IIl\'l'StigilliOIl.
NOW, THI:Rf'FORf', Ihe Panics agree as Illllo"'s:
I. I)Efl\/TIO\5.
I. "Ilro\\'ll" shalllllcan H]'{)\\,ll & [~ro\\'l1. 1111.'.. Hlld any ;llld all or its Sllccessors ill
illlcTCSI and assi~lls, subSidiaries (i1lL'luding but !lOI limited 10 I)rogram 1\,lill1:lgl'Il11'1l1 SL'1"\icL's.
Inc. l)J" "Pt'vISI") :lnd any und all or the;r successors ill interest ;Jlld ,1ssigllS, :Jllll anili.llcs as
dctlllcd ill Rule 2.IO,I,Jc,.1 01' the Rules alld Regul:lIiolls ullder the Secm;t;es Exchallgc' Act of
1l),H
,
"CnlllpCllS,11iun" 'dl:dlllll';I1l <lilY form oJ'rl'lllullcralinll. rl'colllpCIlSC. or lH"Ill.,.'II~ or
more than S50().()() ill <ItllOlllll or vnllle.
J. "Colltingent CUlllpensation" shalllllL'Hll <lilY Compensation p:lid (0 Hro\V1l by all
II1S11l"l~r that is cOlllingclll upon nn)\\,I1: (:1) placing a particular !lumher ot'Plllicics or dollnr \'al\\e of
premiulll \\'ilh that insurer: (h) ;\chic\'illg a parti\.-'ul;lr k\~l ofgr\lwlh in IlK' IHlnlher ni'policil'S
plclced or dollar \'alllc oi'pn.'llliulll wilh thal illsllr~r: (c) 1l1l'l'ling a p;lrticu\;H ml\.-' or rl'k'llliull 01
renew,ll or policies in forcc with tlwl insurer: (d) placing or kl'Cplllg sul"licicnl illsurance business
with that insurer to achieve a paniclllm loss r;llio or allY ull1l'r IllcaslIrc oi'protil<lbility: or (l')
oblaining anything ('hc for that insurer Iw\'ing a \'Hluc or tllOrl' Ihall S50().on.
I. "lJndisl:losl'd COlllPCllS;llilln" sh;dlllll';1I1 allY rorm of COlllpcllsaliull. including.
bulllOllilllited 10 Contingenl COlllpL:ns;\tioll. which \\'a..., 1l1)t specilic"lly <llull'.\plicilly disclosl'd to
lhe polkyhnldcr prior lo the hinding of Ct)\\~rHge I~H llwl pulicyhulder.
II. GE\EIL\L I'IW\'ISIO:\S
), \Vilhlll lell (10) days of thc' execlltioll (lI'lhis !\gl'c'Cllll'lll: (al P',ISI shall payor
callse 10 he paid 1(llhc' Ikpmllllc'lll.lhL' AllorllC'" <;c'llc'"II, '"lll OIR the- '"lll or\l,OIlO,IHIlI.()O 10 he-
dislributed illll1c puhlic illh.:rl'sl. din.'l'lly lo llll' Prl'll'rru\ (im'Cl"IlIllCIlI,llllhura!lC(' TnlSt ("PCiIT"!.
"
n Incal gov~rnnlCllt s~lr-illsur:ltlc~ fund: (b) IhO\\'ll sl1:lIl pay! nr cause 10 hl' paid t(lth~ Ikpilrt1ll~nL
the Attorney Cieneral. and 011< the sum of S I ,XOO,OOO,OO, to be distl'ibuted in the public intel'est
directly to or rur Ihl' h~IlL'llt or olher Florida gO\'erlllllclltlll clltity policyhold~rs of Ihmvll: and, (c)
11m\\'n shall pay 01' enuse 10 be paid to the Department, Ihe Attorlley Ciene""l, alld 011, altorlleys'
tCes alld costs in the ilnH1lllllofSI,OOO,OOO,OO, The Pilrties agl'ee thilt no portiollofthe hinds Il) be
paid by Browll or Pl\,ISI shall bL' cOllsid~rcd a rine or penalty, Tile Parties also agree that ellch
Florida gO\'CI'IlIllL'1l1il1 entity pulicyholder (including P( ;IT)tl"'t CIHlIISL'S tll rccei\'C' a portio[\ of thL'
funds to be paid by 11m\\'n or I'~ISI shalll'\el'lIte a I'ell""" in the limllat ,,'t lillth ill I xhibit ,\,
Ill. IlCSI\ESS PRACTICES
6. In iu.:cordance with thc business prneticcs recenlly \.?mhnscd by the DcparllllCl1l
and 011< 1(11' the inslIl'anee bl'okel'ing businl'ss in 1:lorida, IlI'll\\'U, \lithin sixty (1)0) days of the
l'.'<ccution o!'this .'\gJCl'lllCIlL sll<lll illlph..'IlH.:nt (In till' (''\tellt nol ;lIrl'iHly implcnlclllCd) the husiness
practices described hcrcinalicr, IhO\\-n shall not, directly or indirectly. solicit or accept nllY
Compensation (ilH:lllding hut llot lilllitcd 10 ('olltingcllt ('OIllPl'll-;,llilln) frolll <lilY inSlll\.'l" that is
offered or paid It)!' hestowing <lny 1l1l1;lir or ulll;l\vful iHI\';llltagc llpUIl (hill insurer in the bidding for,
or placclllcnl or, ins\.lrallCl' L.l)\-cragc It)!" 1:llHlda clicnts. The Lkparlllll'llt \\'ill provide Brow11 with
,I letter or undl'rsl:lIHlillg that \Viii ddincatl' what conslitutes an "LJlll~lir or lllllawl'ul <Hlvallt<.lge'. lo
all insurer. [11 additiolJ, Iho\\'11 sllall 110t, dircctly or indircctly. knm\"ingly accept or request frolll
any in:'lurlT any nlls...'. IICtitiOlIS. inllatl'd or artilicial hid or quot...' that 1:-; nol I1ltl'llded to !1l' a
lcgilinHltl' ofk'r 10 procllrl' the business solicited hy Brown for co\'crage of;1 ~'lorida policyholdcr.
Nuthing herein shall preclude Hro\vll frolll accepting or reql1esting allY hOllo tide bid or quote or
frolll requesting non-binding estilllales or intlicilliollS \\"hl'll requcstcd by the pulicyholder. rillillly.
ill plill'ill~. rClh.'\\'illg, consulting Ull or se1"\icing ;lny IIlSl1r;lllCl' p[)lil'~, IhU\\t'l ,..;hallllul. dirn:tly or
.'
indirl'Clly. n:qllcst or acccpt I"rom <lIl)' inslll"l'r, as <l conditinl1 ni" thl' Illsurer's bidding un or
placelllellt or any insurance policy ror Flmida pulicylwlders. <Ill)' promi:-il' ur cOnllllitlllent to l1se
illlY of nrll\\'ll's bl'Ok~rillg. ngcnL'Y, producing or consulting services, including reinsurance
brokerage. agenc)' or producing 'ier\'ices. !"hl' IJartil's <Igr~~ that the listing oJ' thesc prohibitl'd
business practices does not constitute ,I dctcrlllillatiolllhat l31'o\\'11 ha:'i ever l'ng:lgcd in allY of these
practice:'i.
7. In connectioll with ill:'iUranCe hrokering. agency, producing, consulting. \.Ind other
scr\'icl~s rendered in the plnccnlenl. rcncwu!. consultation or sCI'\"icing or (illY insurance pulicy'
issued or to be isslled to I'-lorida pnlicyhulder'i. Hrn\\"ll & IhoWll'S ilgel11S shall accept 110
l'umpellsatioll (illl'luding but Ilut limited to l'lllllillt!l'nt Compe1lsatiun) tn be paid by (lilY insurcr
lInkss. bcfim: tIll' binding or any pulicy.', nnl\\'n, through its Rct:lil Agents (as lklllll'd herein),
discloses. in plain, ullambiguolls written languagl' to tilL' Florida plllicyhulders thc lI~llllre or
lho\\'n':-. Compensatioll (including but not limited to ContillgL'nt COlllpellsation) ;11 conformity
wilh eilher hhihil Il nr H 1(1rI11 11I'1Iposed by Illll\\'1l alld laler appl'lll,,'d hI' Ih,' I Jcparllllelll Hlld
OIR. "lhu\\'1l I\dail t\gl~llt" shall meall those 13rO\\'11 prndLll'illg agl'llts, prmlLll'l'rS, olfices or
openliiolls thHI work direelly with FloridH policyholders ill Ihe plHeelllell1 Hlld proeLlrCllll'll1 of
properly. casuulty and group bClll'lits husiness <IS contemplated lindeI' Fla. Slat. ~ ()~(), 7.11 illlt! 1:1~1.
Stat. ~ (<UL713. If. lHl\\l'ver.:\ policyholder's l'o\'crage is ill il1llllinent danger llt' lapsing. and time...'
and cirClllllstanl'Cs \\ill not 11l'rlllil the \\Tittell di:-.clo:-illl"\.: \)!' ('lllllpl'llSilllOll IHillr In binding,
disclosure in writing in cunformity with L:dlihit I~ slwll he i1l1nll'diatl'ly thCI'L':lncr pro\'Hkd to the
insured. :--.Jothillg ill this paragraph .;;l1all rclil'\'c HrO\\'ll from cOlllplying \\'ith :Iny and all other
oblig:ltiOllS imposed hy l:l\\", rule or rq!,ulatilllL
x, 13 rO\\'11 , ill placing, rcnewillg, consulting on or sl'lyicillg <lilY insurancc policy fur a
Flurida policyholder, shall, lIpOI1 Ihe reqlll'sl or allY Flurida policyholder, prolllplly disclose, (al all
qlloll's suught alld all quotes rccciH'd by Brown in cOllllection \\itb ohtaining coverage or the
policyholder's risk: (11) :IIlY illtC1"est Iho\\'n may have in allY or tlll' prospccti\'c insurcrs or
whoksalc brokers (excluding Lho\\-n's possible O\vncrsllip or securitil's in puhlicly tradl'd l'lllilies
as pari of its ill\'l'stmenl portl'olio ii' Iho\\'I1's O\\lll'rship cOllslitlllL's k'ss thall .Ll)n;) 01" till'
Ollt:-it,IlHlillg class or any security of stich cntity or clltitil's),or any contractual agrC1'1l1ClllS Iho\Vll
may 11<1\\.' with any or the prospccti\l' insurers or wlwkslllc hrnh'rs which ,11\,' providing quotes \'11'
\\'ilh \\hOIll Ihe risk 01' Ihe 1:lorida policylwlder is heillg placed: (el all COlllpel1s"linl1 In he
rl'ccivetl by IhoWll for thc placement or insurancc for cach quotc (ill dollars if kIHl\\-n at that time
or, if the dnllar <1111\)11111 is not knowll <11 that lillll.', [IS a pl.'rCl.'llt<lge of'premiulll) rrom nil)' illsurcr or
\\ hok'sak broker in conllL'l'lioll \\-ith thl' pl:li..'l'lllCIli. rl'n~\\';l1, L'()llslllt<ltilln nil Ilr sl'r\'icing or
insuralllT Ill!" thilt policyholder: (tl) ;ill Compellsalion rl'cordl'd by IhO\\"n during till' preL'l'ding YL'm
I'rom nny insurer 01' whoksak bl'Okl'r ill l'ullllcctioll with thl.' plal'l'lllell!. l'l'lll'\\'<l1. consullatioll Oil
or sCI'\lcing or that policyhol(kr's poliCY: alld, (c) whl'thl'l" thilt pnliL'yhuldc]"'s policy prcmium W<lS
L'iigibk for inclusion ill :111)' Cuntingcnt Compe1lsatioll comptllatio1l,
(), Brown shall implement written stilndards of conduct regarding ('olllpl..:lls(ltion
(il1l.:luding bUl nutlilllitcd to Contingent Compcnsation) Ihllll insurl'rs, cOIlSisll'lll with thl' tcrtllS 01'
this l\greclllcnl. In bl..: uniformly <Ipplictl throughout Bru\\'ll II-II' .my ullicc thal is placing or
sl'l'I'ieil1g il1,"ral1eL' Il)l' allY 1:lurida policyholder, \\'ill1il1 Ihiliy (,~()I days or Il1e e\L'L'lIlioll 01' Ihis
."g.r('clllcllL Bruwl1 shall submit the pruposl'd \\Titll'n stllndards of conduct 10 the Dcpartllll'llt alld
O[R Illl'lheir I'l'l iell' 'lIld approval.
-'
10. I\ddiliollally, BroWI} sl1all conduct ullgUl1lg training or rL,k\'allt C'lllployeL's ill
businC'ss elhics, professional and fiduciary obligations, cOlltlicls or int':l'L'st. anlitrust ami trade
practices cOlllplitlllCC, and record retentiun.
II. 131"0\\"11 shall at all limcs acl in tile best inlerests of ilS cliL'lllS ill determining lhl'
Illost appropriate insurance product or service available for its cliC'llts. 131'0\\"11 shall providc ('nell
Florida policyhol(kr 1'01' whom it places ({wcragc SUnlCiCllt inl'ormation lo cnable the policyholder
lu makc illl(lI"Illed cimices regarding insurance products or :',('r\"ic('s.
12. 131'0\\'11 shall l"ttlly ~111t1 promptly L'llopL'ralc wilh the IkpartlnellL the 1\[(orney
(iCHer,d, and OIR in any relalcd procL'cdillgS or actiolls \\'Itll regard to lllL' Ill\'L'sti~ati()lI. Browll
agrcl'S rurther to make i.\\'ailabk any of its orlicL'rs, L'lllployecs Dr direclors wholll Ihl' Dep<lI'llllCl1l.
lhe ,'\ltorney (Jcllcral or OIR llWY (ksirc to inlct"\"le\\'.
IV. OTHER I'IW\'ISIO\,S
I.~. SubjL'CI lo specilic pCrlllr1nalll'L' by Iho\\'ll or tl1c pnl\'isinns Sl't runh hereill alld
~xt:(:pl <IS sel furlh ill p<l1"<Igraph 21, inji'(/. regarding cnt~ll.CL'lllelll 01' Il1i", .'-\grCL'lllL'llt, [he
Department. the I\llumey (ieuer,,!. anti OIR agrL'e that they shall nul institute any cil'il or
,Hltllillislr<lli\L~ actioll in <Iny slate or tl'deral CDUn or Irihllll;lI ilgalnst Ihm\ll or ih dil\.'Clol"" or
ollicers rl'ganlillg thL' receipt by IhO\\'ll of l ;ndisclosed C'OlllPl'llS<llioll or an)' oll1cr kIHl\\ 11 claill1
lhat \\'as raisl'd ur could 11(1\'e llL'L'll r,liscd in thl' In\'cstig.;ltion to the dale or tilL' execulion 01' this
AgrL'cml'llt. Till' Parties agree lhat all claims and rights against any Iwr"oll or party other lh:lll
nl\)\\'ll and its direclors <llltl orJlcL'l"S Sll,tllllol be .tllected nr imp"irl'd ill ,lilY \\ ay by llll' L'xccutillll
of this .'\grcL'IllL'1l1.
(,
14. This I\grcelllcllt is nol illtl'ndcd 10 prohibit BI"O\\'ll or any or ilS currcnl officers.
direClors, employecs or agl'llls from Cllg~lgillg ill allY 1.[\\' I'll 1 busil1l'SS ill I-"Ioridtl or ;n allY olher
jurisdiction.
15. TIll..' Panics agrec that this !\grccl1ll.'llI is 1101 illlclHk:d In alld shall not cnnfer <ln)'
rights upon <lilY other person or elltity.
1 (L The llarlics agrec that this t\gn.:cmcllt conlains lhc cntirc agl"L.'l.'IllClll belwccn thcm
with regard to Ihe matters set forth in lhis ,\grcclllclll. There an.: no other underslandings or
agn.':cllll'IlIS, verbal or othcnvise. betwecn the Pnnil'S. cxcept as sl'l furth herein, Thcl"l' have been
110 rl'presl'Il1alions tlOl scl l(lrlh herein thaI .11lY Pmty has fl.'lied UpOIl ill l'ntcring into this
t\gn:Cllll'llt.
17, Tilis ;\grccll1cnt lll~lY not be modi lied, changed. callel'11ed. alllended or \'aricd. llor
may' ~ll1Y or ,111 or its tCl"lllS hl.' wai\ cd. e.\cq)( h~' a writing siglll'd by alllli" till' ]l.lnies.
I X, This :\grl.'Cl1h.'llt Ill;lY he c.\l.'cllled illl'lHll1h,.'rparh,
ll). Neither this i\grcl'IlK'IlI, nur allY act !1l'rJ'orlllcd nr dOCllllll'llll'.\eclltl'd pursuant to
or III furtherance or this I\grcl'mcnt, is now or may be dl'l'1llcd ill the future III he all admission of
or ('\-idl.'m:l' of liability or any \\Tongdoing hy l3ruwll with 1'l'.,;pl'cl to Ihe suhjcl't Ilwttl'l" or thl'
11lvl'stigatiotl, except ill <lilY action to L'llt()I"Cl'. or 1'01' hrl\lcl1ur. this l\g],l'Clllcnt.
20, Thi... Agrl'l'llll'lll shall bl' construcd ;\lld intl'rpr..'ted ill accOrdalll'l' \\itl1tllL' Ill\\''\ or
the Slall' of Floridll withoUl rq~ard to allY cont1ict of 11\\\-s provisiolls,
21. Thl' Pilrlil's agrcl' thaI the sole and l.'.\clusi\'l' \CIHle !()r UIlY actiun 10 clll(HCl'. ur
1'01' breach of: Ihis Agreelllenl sball be in Ibe Cireoil Coort in allll for Ibe Second .Iudicial Circuil.
Ll'olll.'oLlllly, Florida.
,
1 )
Thl: Parties 1"l'\1rcsC1l1 and warrant that l11e person C.\L'Cllting this ;\grcC'IllL'llt 011
bchall'orcach Parly has the kgal authority to bind tlle Party to thL' ll'l'lllS ol'this Agn..'l'llll'1l1.
23. I'l1e Panics ugrcl' 10 cooperate fully with olle another in implelllenting Ihis
Agrcement.
CIL\RI YS ,). CRIST,.II'.
Attorney ('('Ileml
TO\I (;AI,I,,\l;IIER
('hier Fil,,"ci,,1 Officer
DENNIS SILVi:R"IAN
Deputy (jcllL'ral ('{HIIlSl'l
1.'lmid" I)m No, OJ 1,1,1'111
".II('IIAI,I. D.'\VIIlSON
l\ssislmlt (j(,llcral Coullsel
Flmid,r B"r No, 1<) 163 'I
Department of Financial ScrvicL's
2110 I'.. (i"illL's Srreet, Suile () I 2
l'alllllwssl'C'. Florida 323l){L0333
I'l'lephl1lll': (X:ill) ,II .1..11 (,2
L. C1_i\ YTON ROLll,RTS
Deputy 1\lIorney C ielleral
PATRICli\ ;\, ('ONNi:RS
nircl'lor. !\nlitrllsl Divisioll
I.IZ/\JlI;,TII/\ LEEDS
Senior Assistant Attorney (jcncral
RUSSELL S, KI'NT
t\ssislilllt AllorllCY Cicllcral
UIRISTOPIIEI( R,IIUNT
Assistullt :\1l0r1le)' \ll'IH.:ral
Omce ,J[' the ..\\lmlle)' (;ellL'r,,1
,\Illilrllst Di\'isioll
I'I.,{) I, Th~ Capilol
T"II"h"",'e. Florid" 32.\')<),1 ():i{)
1(10:\'1:\ \1. \ICC\RT\'
t '{l1ll1l1ission~r.
Olliu:, or Insurance ]{qttllation
STLVI'N f1, 1>i\RTON
(icllcral Counsel
Florida 13,,1' No, I ~~,1:i'/
JI"I L. 13LNNI,!!
1.'lol'ida !Jar No 1J'I6,I,I-lc
Assistant (icllcral ('OUllSL']
(Hike or InsuraJlce l{q~1I1;1IiOll
2{){) I:, Ciailles SII'ee\. Suit,'
leleplwlIl': (~:ill) ,II.l,~ I'll
x
IlIW\\''18: IlRO\V'I. 1'1(',
Corporall' Sca I
Ily'
ROIJIORT W, LLOYD
I\SSist<llll CiCll('ra1 COUIlSel
.~2() South Ridgc\\'Olld A\'Cllll~
Daylolla lleach. Florida 3211,1
Telepholll' .1Xr,,21<),5752
DATI;!),
,)
Exhibit B
Compensation Disclosure
TIle following compensation disclosures must be utilized in insurance
proposals by Brown t/lrougl1 its Retail Agents to its Florida policyl1olders.
All italicized language below is for informational purposes only and sl1all
not be incorporated witl1in tile text of tile compensation disclosures to
Florida policyflOlders.
The following is required in all insurance coverage proposals from Brown Ihrough
its Retail Agents to its Flol/(Ia policyholders
Compensation, In addition to the commissions or fees received by us for
assistance with the placement, servicing, claims handling, or renewal of your
insurance coverages, other parties. such as excess and surplus lines brokers,
wholesale brokers, reinsurance intermediaries. underwriting managers and
similar parties, some of which may be owned in whole or in part by Brown &
Brown, Inc" may also receive compensation for tlleir role in providing insurance
products or services to you pursuant to their separate contracts Witll insurance or
reinsurance carriers, That compensation is derived from your premium
payments, Additionally, it is possible that we, or our corporate parents or
affiliates, may receive contingent payments or allowances from insurers based
on factors which are not client,specific, such as the performance and/or size of
an overall book of business produced with an insurer, We generally do not know
if such a contingent payment will be made by a particular insurer, or the amount
of any such contingent payments, until the underwriting year is closed, That
compensation is partially derived from your premium dollars, after being
combined (or "pooled") with the premium dollars of other insureds that have
purchased similar types of coverage, We may also receive invitations to
programs sponsored and paid for by insurance carriers to inform brokers
regarding their products and services, including possible participation in
company-sponsored events such as trips, seminars, and advisory council
meetings, based upon the total volume of business placed Witll the carrier you
select. We may, on occasion, receive loans or credit from insurance companies,
Additionally, in the ordinary course of our business, we may receive and retain
interest on premiums you pay from the date we receive tllemuntil the date of
premiums are remitted to the insurance company or intermediary, In the event
that we assist with placement and other details of arranging for the financing of
YOllr insurance premium, we may also receive a fee from tile premium finance I
~ol!:l.e..a.'1.L___,___,__n ___ _~I
If Brown utilizes an intermediary /)rolwr for the placement of coverage for the
Florida policyholder, Brown, through its Retail Agent, must include the following
disclosure ;n addition to the disclosure a/)ove,'
Wholesale Broker/Manaqinq General Aqent:
[IDENTIFY]
This intermediary __n" is/ _ is not owned in whole or part by Brown &
Brown, Inc" the parent company of (retail office name), Brown & Brown entities
operate independently and are not required to utilize otller companies owned by
Brown & Brown, Inc, but routinely do so, In addition to providing access to the
insurance company, the Wholesale Insurance Broker/Managing General Agent
may provide additional services including, but not limited to: underwriting; loss
control; risk placement; coverage review; claims coordination with insurance
company; and policy issuance, Compensation paid for those services may be up
to 15 % of the premium you pay for coverage, and any compensation paid for
those services is deri':.,ed from your pre~~,~~llpaymenL ,___ _..,_,_,__"
If Brown a/1(llor its Retail Agents or other Brown agents are compensated /)y fee
in lieu of commission under a written fee agreement with a Florida policyholcler,
Brown, through its Retail Agenl, must include the following disclosure instead of
those a/Jove,
---- --.
If we are being compensated based upon a fixed dollar amount or fixed
percentage fee, meaning that the contract specifies our compensation and states
anywhere in the document tllat additional compensation will not be paid to us or
any other party, any additional compensation to us or any other party, including
wllolesale brokers or third party intermediaries, is strictly prollibited Likewise, if
our contract sets compensation based upon a fixed dollar amount or fixed
percentage fee, and the contract specifies that additional compensation shatl be
credited to the insured, any additional compensation to any party, including
brokers, wholesale brokers or third party intermediaries, must be promptly
returned to you. If our contract is not based upon SUCll fixed fee terms, no owned
or affiliated party, including brokers, wholesale brokers or third party
intermediaries, may accept any type of compensation without full disclosure by
the undersigned broker to you of the dollar amount or percentage of
come.~~sation priJ)L.~c:>.binding YOl~r coverage,
If Brown, through its Retail Agent or other Brown agent, is placing a Florida
public entity policyholder in the Preferred Govemmentallnsurance Trust (PGIT),
Brown, through its Retail Agent. must include the following disclosure Instead of
those a/Jove:
2
_._---~--- .---~~.-
We appreciate tile opportunity to assist with your insurance needs, Information
concerning additional compensation paid to other entities for tllis placement and
related services appears below, Please do not Ilesitate to contact us if any
additional information is required,
Our office is owned by Brown & Brown, Inc, Brown & Brown entities operate
independently and are not required to utilize otller companies owned by Brown &
Brown, Inc" but routinely do so,
For the 2005-2006 policy year, your insurance was placed with Preferred
Governmental Insurance Trust (PGIT), PGIT is an insurance trust formed by
Florida public entities througll an Interlocal Agreement for tile purpose of
providing its members witll an array of insurance coverages and services, PGIT
ilas contracted witll entities owned by Brown & Brown, Inc, to perform various
services, As explained below, tllose Brown & Brown entities are compensated for
tileir services,
PGIT Ilas contracted witll Public Risk Undelwriters (PRU), a company owned by
Brown & Brown, Inc" to administer PGIT's operations Tile administrative
services provided by PRU to PGIT include:
. Underwriting
. Coverage review
. Marketing
. Policy Review
. Accounting
. Issuance of PGIT Coverage Agreements
. PGIT Member Liaison
. Risk Assessment and Control
Pursuant to its contract witil PGIT, PRU receives an administration fee, based on
tile size and complexity of the account, of up to 12,5% of tile premium you pay to
PGIT, PRU may also receive commissions from insurance companies with whom
it places your coverage, wllicll commissions are derived from the premium you
pay to PGIT, Multiple undelwriters may be involved in the placement of your
coverage, If so, they also may be compensated for their services from the
premium you pay to PGIT,
PGIT has also contracted witil Preferred Governmental Claims Solutions
(PGCS), a company owned by Brown & Brown, Inc, for purposes of
administering the claims of PGIT members, The services provided by PGCS to
PGIT may include:
. Claims Liaison witlllnsurance Company
. Claims Liaison with PGIT Members
,~, Claims Adju_s~llent
.J
Pursuant to its contract witll PGIT, PGCS receives a claims administration fee for
those accounts which PGCS services of up to 5% of the nonproperly portion of
the premiums you pay to PGIT,
PGIT also utilizes wholesale insurance brokers, some of which (such as
Peachtree Special Risk Brokers and MacDuff Underwriters) are owned by Brown
& Brown, Inc" for the placement of PGIT's IIlsurance policies, and for indiviclual
risk placements for some PGIT members (excess and surplus lines, professional
liability coverage, etc.) The wllolesale insurance broker may provide the following
services:
. Risk Placement
. Coverage review
. Claims Liaison with Insurance Company
. Policy Review
. Current Market Intelligence
The wllOlesale insurance broker's compensation is derived from your premium,
and is largely dictated by the insurance company, It typically ranges between
10% and 17% of the premiums you pay to PGIT for your coverage, Some
wllOlesale brokers used by Brown to place your coverage may also act as
Managing General Agents for various insurance companies, and may be
compensated directly by those insurance companies for their services in placing
and maintaining coverage with those particular companies,
The wholesale insurance brokerage utilized in the placement of your properly
insurance was [INSERT NAME OF BROKER: e,g,- Peachtree Special Risk
Brokers). which is a company owned by Brown & Brown, Inc, Furthermore, any
professional liability coverage afforded by tile package of insurance you
purchased was acquired through Brown & Brown Public Entity Services
(BBP~~), whi~~Js also a cOlllpany affiliatedwJth .E3ro~'2..& Bro"'.r1., Inc,
4
TO:
FROM:
DATE:
RE:
City of Sunny Isles Beach
18070 Collins Avenue
Sunny Isles Beach, Florida 33160
(305) 947-0606 City Hall
(305) 949-3 II 3 Fax
(305) 947-2150 Building Department
(305) 947-5107 Fax
City Commission
Norman S. Edelcup, Mayor
Lewis J. Thaler, Vice Mayor
Roslyn Brezin, Commissioner
Gerry Goodman, Commissioner
Danny Iglesias, Commissioner
A. John Szerlag, City Manager
Hans Ottinot, City Attorney
Jane A. Hines, CMC, City Clerk
MEMORANDUM
Doug Haag, Assistant City Manager/Finance
Priscilla Walker, CMC, Deputy City Cler~7~
June 26, 2007
Ratification of Settle Agreement with Brown & Brown, Inc.
At its regular meeting of June 21, 2007, the City Commission adopted Resolution No. 2007-
1118, which ratified a Release Agreement with our insurance broker Brown and Brown, Inc.
Attached is a copy of the approving resolution to assist you in processing this item.
Thank you.
/pw
Attachments
cc: Tom Acquaro, Human Resources Director
Brown & Brown Settlement Agrmt ($27,960.10) Apprvl Memo
OF SUN
TO:
FROM:
DATE:
RE:
City of Sunny Isles Beach
18070 Collins Avenue, Suite 250
Sunny Isles Beach, Florida 33160
(305) 947-0606 City Hall
(305) 949-3 I 13 Fax
(305) 947-2150 Building Department
(305) 947-5107 Fax
City Commission
Norman S. Edelcup,Mayor
Lewis J. Thaler, Vice Mayor
Gerry Goodman, Commissioner
Roslyn Brezin, Commissioner
Danny Iglesias, Commissioner
A. John Szerlag, City Manager
Hans Ottinot, City AlIorney
,Jane A. Hines, CMC, City Clerk
MEMORANDUM
The Honorable City Commissi~ .~~
Hans Ottinot, City Attorney U r::' -
June 8, 2007
Proposed Resolution Approving the Release in "State of Florida v. Brown & Brown"
RECOMMENDATION:
This Proposed Resolution Approving the Release in "State of Florida v. Brown & Brown" is presented for
your consideration and approval.
REASONS:
The State of Florida recently entered into a Settlement Agreement with Brown & Brown, Inc. ("Brown"),
the insurance company that underwrites policies on behalf of the City of Sunny Isles Beach, Florida
("City"). The State alleged that Brown received undisclosed compensation in connection with insurance
coverage placed on behalf of certain Florida policyholders, including theCity.
Brown denied any wrongdoing; however, in an effort to avoid the expense of protracted litigation, Brown
and the State entered in the Settlement Agreement. Brown agreed to pay $3 million directly to the
Preferred Governmental Insurance Trust, $1.8 million for the benefit of other Florida governmental entity
policyholders of Brown (including the City), and $1 million in attorney's fees and costs to the State.
Brown further agreed to utilize compensation disclosure forms for all future insurance proposals. (A copy
of the Settlement Agreement is attached hereto as Exhibit "A").
Brown's policyholders who execute a Release are entitled to payment under the Settlement Agreement.
The State advises that the City is entitled to $27,960.13, based upon its relative percentage of overall
premiums paid by Brown's Florida governmental entity policyholders from 1998 to 2005. The amount of
$27,960.13 was calculated by multiplying the City's relative percentage by the $1.8 million settlement
allotted for the benefit of Brown's Florida governmental entity policyholder. The proposed Resolution
will authorize the City to receive this settlement amount.
Agenda Item
Date