Travelers 2005 Annual Report Download - page 216

THE ST. PAUL TRAVELERS COMPANIES, INC.AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
204
17. CONTINGENCIES, COMMITMENTS AND GUARANTEES
legal basis to collect the amounts due under the reinsurance contracts and intends to vigorously pursue the
actions.
Based on the Company’s beliefs about its legal positions in its various reinsurance recovery
proceedings, the Company does not expect any of these matters to have a material adverse effect on its
results of operations in a future period.
As part of ongoing, industry-wide investigations, the Company and its affiliates have received
subpoenas and written requests for information from government agencies and authorities. The areas of
inquiry addressed to the Company include its relationship with brokers and agents, the Company’s
involvement with “non-traditional insurance and reinsurance products,” branding requirements for salvage
automobiles and the reporting of workers’ compensation premiums. The Company or its affiliates have
received subpoenas or written requests for information, in each case with respect to one or more of the
areas described above, from: (i) State of California Office of the Attorney General; (ii) State of California
Department of Insurance; (iii) Licensing and Market Conduct Compliance Division, Financial Services
Commission of Ontario, Canada; (iv) State of Connecticut Insurance Department; (v) State of Connecticut
Office of the Attorney General; (vi) State of Delaware Department of Insurance; (vii) State of Florida
Department of Financial Services; (viii) State of Florida Office of Insurance Regulation; (ix) State of
Florida Department of Legal Affairs Office of the Attorney General; (x) State of Georgia Office of the
Commissioner of Insurance; (xi) State of IllinoisDepartment of Financial and Professional Regulation;
(xii) State of Iowa Insurance Division; (xiii) State of Maryland Insurance Administration;
(xiv) Commonwealth of Massachusetts Office of the Attorney General; (xv) State of Minnesota
Department of Commerce; (xvi) State of Minnesota Office of the Attorney General; (xvii) State of New
Hampshire Insurance Department; (xviii) State of New York Office of the Attorney General; (xix) State of
New York Insurance Department; (xx) State of North Carolina Department of Insurance; (xxi) State of
Ohio Office of the Attorney General; (xxii) State of Ohio Department of Insurance; (xxiii) Commonwealth
of Pennsylvania Office of the Attorney General; (xxiv) State of Texas Department of Insurance; (xxv) State
of Washington Office of the Insurance Commissioner; (xxvi) State of West Virginia Office of Attorney
General; (xxvii) the United States Attorney for the SouthernDistrict of New York; and (xxviii) the United
States Securities and Exchange Commission. The Company and its affiliates may receive additional
subpoenas and requests for information with respect to the areas described above from other agencies or
authorities.
The Company is cooperating with these subpoenas and requests for information. In addition, outside
counsel, with the oversight of the Company’s Board of Directors, has been conducting an internal review of
certain of the Company’s business practices. This review initially focused on the Company’s relationship
with brokers and was commenced after the announcement of litigation brought by the New York Attorney
General’s office against a major broker.
The internal review was expanded to address the various requests for information described above
and to verify whether the Company’s business practices in these areas have been appropriate. The
Company’s review has been extensive, involving the examination of e-mails and underwriting files, as well
as interviews of current and former employees. The Company also continues to receive and respond to
additional requests for information and will expand its review accordingly.
(Continued)