CORRECTING and REPLACING Willis Group Calls on Insurance Industry to End Practice of Contingent Agreements with Insurance Carriers

First graph, first sentence should read: XXX representatives of the New York Superintendent of Insurance and Attorney General XXX. sted: XXX the New York Superintendent of Insurance and Attorney General XXX. The corrected release reads: WILLIS GROUP CALLS ON INSURANCE INDUSTRY TO END PRACTICE OF CONTINGENT AGREEMENTS WITH INSURANCE CARRIERS Proposes Standards for Making Compensation Agreements for all Brokers Transparent Don Bailey, CEO of Willis North America, a subsidiary of Willis Group Holdings (NYSE: WSH), the global insurance broker, today appeared in front of representatives of the New York Superintendent of Insurance and Attorney General at a Public Hearing in Buffalo, New York, to address the subject of insurance producer compensation standards and disclosure. Mr. Bailey called for the insurance industry to end contingent compensation agreements. A proposed regulation pertaining to this issue is currently under consideration by the New York State Insurance Department. "Establishing a standard set of principles for insurance broker compensation and disclosure is critical to improving trust and transparency in the industry,” said Mr. Bailey. "Clients of all sizes and complexities need to be absolutely certain that their brokers keep their interests paramount; otherwise, they will question the integrity of the services we provide. For us, that’s not acceptable. We believe client trust is non-negotiable.” In October 2004, Willis became the first major insurance broker to voluntarily commit to ending the practice of accepting contingent commissions. Over the last several years, Willis Chairman and CEO Joe Plumeri has been an outspoken public advocate of applying a consistent standard for compensation practices and transparency in disclosure in order to strengthen client confidence and faith in the insurance industry. In calling for an industry-wide end to contingent compensation agreements, Mr. Bailey said, "We did away with contingent payments because we believe that brokers should be paid for the quality of service they provide to clients, not for the volume of business guided to a carrier and not for the profitability of a client to a carrier. In this spirit, we are proposing that all broker contingent compensation agreements be abolished throughout the insurance industry; that all broker compensation be made transparent; and, that a level playing field be created where all brokers abide by the same rules.” Mr. Bailey will be participating in a series of hearings held throughout the state in July. About Willis Group Holdings Willis Group Holdings Limited (NYSE: WSH) is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 300 offices in some 100 countries, with a global team of approximately 16,000 Associates serving clients in some 190 countries. Additional information on Willis may be found at www.willis.com. Editor’s Note: A copy of the full text of Mr. Bailey’s address can be obtained from the "Media Room” on willis.com at www.willis.com/Media_Room . Oral Testimony for July 14 Public Hearing Don Bailey, CEO, Willis North America Good morning. I’m pleased to be here on behalf of my colleagues at Willis Group to discuss our views on issues surrounding insurance producer compensation. This is an issue that we believe is critical to improving trust and transparency in our industry. In October 2004, Willis became the first major insurance broker to voluntarily commit to end the practice of accepting contingent commissions. No one forced us to do this; we did it because we thought it was the right thing to do for our clients. Clients need to be absolutely certain that their brokers keep their interests paramount; otherwise, they will question the integrity of the services we provide. For us, that’s not acceptable. We believe client trust is non-negotiable. We don’t want there to be even an appearance of a conflict of interest that might undermine that trust. That’s one reason why, back in 2004, we codified how we do business with clients in our Client Bill of Rights – a ten-point document emphasizing our commitment to client service, transparency and best practices. It’s the framework for what clients can and should expect from us to make sure we always have our eyes squarely on their best interests. And that focus has served us and our clients very well in recent years. In this spirit, we have been strong proponents of full transparency in compensation practices. Our Chairman and CEO, Joe Plumeri, has been an outspoken public advocate for the importance of transparency in strengthening client confidence and faith in our industry. As important as being transparent is, it still isn’t enough. We do not believe that it is enough to just reveal a practice that you know is not in your clients’ best interest. That’s not honoring the spirit of making your clients’ interests paramount. We believe compensation should be paid fairly and in a way that is appropriate to the transaction. One of the reasons we did away with contingent payments is because we believe brokers should be paid not for the volume or profit of business guided towards a carrier, but rather for the quality of their service to clients, such as securing the best possible coverage and getting claims paid promptly. For example, Broker A takes contingents based on the profitability of that client for the carrier. Will Broker A be truly motivated to fight for payment of a claim when appropriate, as opposed to Broker B who does not accept payment from the carrier based on profitability? We think the client is best served by Broker B, whose only interest is having their client's claim paid. After all, isn't that why we buy insurance to begin with? We also believe there should be a level playing field in our industry. That doesn’t exist on the brokerage industry landscape today. Because many brokers continue to accept contingent or supplemental payments from insurers, we and other brokers that don’t accept contingents are operating at a competitive disadvantage. We are constrained in our ability to compete on price with those who still accept contingents. It’s a simple fact that brokers who accept contingent commissions are essentially getting a subsidy from insurers on the prices they offer clients. For example, if Broker A takes contingents for placing business with a carrier, he can offer a lower price to his client and seem more price competitive than Broker B who does not receive additional income from a carrier because Broker B does not take contingent commission. We believe that former Attorney General Spitzer missed a great opportunity to do the right thing when he not only stopped short of banning all brokers from accepting contingents, but he allowed insurance carriers to pay contingents to part of the market. This imbalance in the playing field is further compounded by the annual compliance costs borne only by Willis and the other major brokers subject to the current scheme of regulation. We are grateful to the New York State Attorney General and New York State Department of Insurance for recently taking an important step to level the playing field somewhat by amending our original agreement with you to permit acquisitions of brokers who do accept contingents. This allowed Willis to enter into an agreement to acquire HRH. And, consistent with our amended agreement and our philosophy, we are committed to phasing out HRH’s contingent commissions over three years. We think that clients across the industry would benefit from phasing out contingent commissions over a reasonable period of time. Frankly, if contingent commissions are bad for clients of large brokers because they may pose a conflict of interest, how can they be good for the clients of smaller brokers? The answer, of course, is they’re not good for anyone. We see several potential avenues to achieving this goal in a fair manner: One option is to require any broker renewing a license with the New York State Insurance Department to end the practice of accepting contingent payments, say by 2010. Another option would be to adopt a market solution. This is how the FSA in the UK effectively addressed the issue of contract certainty. In 2004, in lieu of mandating new rules, the FSA challenged the insurance industry to achieve contract certainty within two years, which all members of the industry joined together to successfully accomplish. A similar challenge could be made to brokers to end contingent commissions. Again, we don’t think it’s necessary to abolish contingent commissions overnight. They should be phased out over a reasonable period of time that will allow brokers to adjust their business models. In the interim, however, we believe transparency should be enhanced and mandated to make sure that clients can clearly see how brokers are being paid. This will alert them to potential conflicts of interest they may not know exist. And, we believe mandating full pricing transparency for all members of the industry – agents as well as brokers – would enhance confidence in our entire industry. Some brokers argue that clients don’t really care about contingents, so why should regulators care? We believe clients do care. Some may be more familiar with the impact of contingent commissions than others, but all clients want their interests put first. All clients want full transparency on pricing for products. We believe regulators should do what’s best for all clients and the integrity of the industry overall. To summarize, Willis asks that: 1. All contingents are abolished. 2. All broker compensation is made transparent, and, 3. A level playing field is created where all brokers abide by the same rules. Fundamentally, we believe that this is a great opportunity for New York State regulators to set the stage for what the insurance brokerage industry can become, transforming how we operate in a way that elevates our clients interests, advances openness and improves service. Thank you.