Travelers 2008 Annual Report Download - page 76

in the above-referenced class actions, filed an amended consolidated class action complaint naming
various brokers and insurers, including the Company and certain of its affiliates, on behalf of a putative
nationwide class of policyholders. The complaint included causes of action under the Sherman Act, the
Racketeer Influenced and Corrupt Organizations Act (RICO), state common law and the laws of the
various states prohibiting antitrust violations. The complaint sought monetary damages, including
punitive damages and trebled damages, permanent injunctive relief, restitution, including disgorgement
of profits, interest and costs, including attorneys’ fees. All defendants moved to dismiss the complaint
for failure to state a claim. After giving plaintiffs multiple opportunities to replead, the court dismissed
the Sherman Act claims on August 31, 2007 and the RICO claims on September 28, 2007, both with
prejudice, and declined to exercise supplemental jurisdiction over the state law claims. The plaintiffs
are appealing the district court’s decisions to the U.S. Court of Appeals for the Third Circuit.
Additional individual actions have been brought in state and federal courts against the Company
involving allegations similar to those in In re Insurance Brokerage Antitrust Litigation, and further actions
may be brought. The Company believes that all of these lawsuits have no merit and intends to defend
vigorously.
In addition to those described above, the Company is involved in numerous lawsuits, not involving
asbestos and environmental claims, arising mostly in the ordinary course of business operations, either
as a liability insurer defending third-party claims brought against policyholders, or as an insurer
defending claims brought against it relating to coverage or the Company’s business practices. While the
ultimate resolution of these legal proceedings could be material to the Company’s results of operations
in a future period, in the opinion of the Company’s management, none would likely have a material
adverse effect on the Company’s financial position or liquidity.
The Company previously reported that it sought guidance from the Division of Corporation
Finance of the SEC with respect to the appropriate purchase accounting treatment for certain second
quarter 2004 adjustments totaling $1.63 billion. See ‘‘Item 1B—Unresolved Staff Comments.’’ After
discussion with the staff of the Division of Corporate Finance and the Company’s independent auditors,
the Company continues to believe that its accounting treatment for these adjustments is appropriate.
On May 3, 2006, the Company received a letter from the Division of Enforcement of the SEC (the
Division) advising the Company that it is conducting an inquiry relating to the second quarter 2004
adjustments and the April 1, 2004 merger of SPC and TPC. The Company cooperated with the
Division’s requests for information.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information about the Company’s executive officers is incorporated by reference from Part III,
Item 10 of this Report.
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