ALEXANDER FORBES LIMITED - REVIEW OF CONTINGENT COMMISSION ARRANGEMENTS
Alexander Forbes Limited
(Incorporated in the Republic of South Africa)
(Registration number 1958/001974/06)
Sharecode: AFB
ISIN code: ZAE000018230
REVIEW OF CONTINGENT COMMISSION ARRANGEMENTS
There is currently a well publicised investigation into the business activities
of a number of the large US-based Global Insurance Brokers. This has expanded
from an inquiry into contingent commission agreements with insurance carriers to
an active investigation of improper business practices, specifically bid-
rigging. Alexander Forbes is not involved in the investigation and we have not
been subpoenaed in relation to the cases being reported. It is our policy to
always act in the best interests of our clients. Bid-rigging is contrary to
clients` best interests and is not tolerated in our business.
Contingent commission agreements with insurers are widely recognised as long
standing industry practices. In light of the recent market developments we have
initiated a full review within our UK and SA insurance broking businesses to
identify all arrangements that could be construed as contingent commissions. To
the extent this review reveals any volume- or profit-contingent commission
payments to our insurance broking businesses, we intend to discontinue these
arrangements in line with other major global insurance brokers. The review is
scheduled to be completed and the findings released together with the group`s
interim results on 15 November 2004.
Alexander Forbes prides itself on its record of maintaining long-term client
relationships built on trust and integrity. We will continue to always act in
the best interests of our clients.
28 October 2004
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