It provided an instant settlement of a suit that was filed today by Mr. Spitzer's office in State Supreme Court in Manhattan and a citation issued by the New York Insurance Department which alleged that for years Aon received special payments from insurers to the detriment of the brokerage's clients.

The payments were described as "above and beyond normal sales commissions."

These payments, known as "contingent commissions," were billed as compensation for "services to underwriters," but Mr. Spitzer's complaint said they were actually "rewards" for the business that Aon steered and allocated to insurers.

Aon announced last year that it would stop accepting such payments from insurers

Under the settlement's provisions, Aon will provide the $190 million over a three-year period for restitution to policyholders.

Among the reforms adopted by Aon is a new policy which will see the broker accepting only a specific fee from the client and a specific commission from the insurer which is set at time of purchase.

Any commissions paid by an insurer will be fully disclosed to Aon customers at the time of placement and must be approved by Aon customers.

Aon Chairman and Chief Executive Patrick Ryan issued a public statement apologizing for Aon's improper conduct. In his statement, Mr. Ryan said Aon had used contingent agreements "that created conflicts of interest."

"I deeply regret we took advantage of those conflicts," Mr. Ryan stated. "Such conduct was improper and I apologize for it."

The agreement with Aon was modeled after a Jan. 31 settlement for $850 million that was reached with Marsh & McLennan Companies, the parent of Marsh, Mr. Spitzer stated.

"The underlying complaint in this case shows that improper conduct was pervasive at Aon," said Mr. Spitzer, who announced the settlement together with Acting New York State Insurance Superintendent Howard Mills, Connecticut Attorney General Richard Blumenthal, Illinois Attorney General Lisa Madigan, and Illinois Acting Director of Insurance Deirdre Manna.

Mr. Spitzer noted that to Aon's credit, "the company has acknowledged the problems, has agreed to compensate policyholders, and has adopted reforms that will provide greater accountability in the future."

The complaint against Aon acknowledged that industry representatives have defended the long-standing contingency fee practice as acceptable and even beneficial to clients. But Mr. Spitzer's office and the New York Insurance Department said they have uncovered "extensive evidence" showing that the practice distorts and corrupts the insurance marketplace and cheats insurance customers.

The suit also alleged that Aon, in addition to promising to send business to insurance company partners in exchange for cash payments, promised to place business with insurers who agreed to use Aon's reinsurance brokerage services.

Mr. Ryan, it was charged, as CEO was involved in efforts to boost placements with an insurer in exchange for that company's use of Aon Re for reinsurance brokering.

The complaint against Aon cites various internal communications in which "top executives openly discussed these efforts to maximize Aon's revenue and insurance companies' revenues," without regard to Aon clients' interests.

Michael O'Halleran, Aon's chief operating officer and the broker's second-in-command, it was charged in the complaint, personally negotiated "clawback" arrangements in which Aon Re would provide insurers with discounts or rebates on its reinsurance commissions on the condition that Aon could recover or "claw back" these discounts through retail placements made with same insurers.