Aon said it will be able to take a tax deduction on its $190 million settlement with the New York Attorney General's office and other authorities over alleged contingency fee abuses.
In a 10-K filing last week, the Chicago-based broker said the settlement is considered fully tax deductible and, through a series of accounting principles, it will be reflected on its books as the settlement payments are made.
Aon, which announced the agreement in early March, will make three payments into a fund to be paid to clients whose premiums were included to trigger volume-based contingency fee payments from insurers to the brokerage. Those who opt into the agreement will receive a proportionate share of the settlement. There will be two $76 million payments on Sept. 1, 2005 and 2006, and a $38 million payment on Sept. 1, 2007.
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