Just over a year ago, New York Attorney-General Eliot Spitzer sent shockwaves through the insurance world when he announced he was launching an investigation into broking giant Marsh & McLennan. Spitzer accused Marsh, along with a number of other brokers and insurance companies, of conspiring to fix prices in the industry.
The resulting proceedings, which have included subpoenas, the threat of litigation and settlements, have been watched keenly by those companies not directly involved. Among those keeping an eye on things from across the Atlantic is the general counsel of Aspen Re, David Curtin.
“The insurance business will be seriously affected by these investigations and the kind of practices that have been made public and criticised,” Curtin says. “It’s inevitable that commissions are going to be more transparent – if these practices do exist, then it’s a good thing to weed them out.”
Sitting in his office at Aspen, situated just yards from Lloyd’s of London, Curtin is ideally placed to watch the Spitzer probe develop. But it has been only a brisk 18 months since he joined the fast-growing company, ahead of its December 2003 public listing on the New York Stock Exchange.
Curtin’s career began in his native US, where he practised corporate and finance law with Jones Day for 10 years. The firm sent him across the Atlantic, where he spent some time in Jones Day’s London office. He then spent four years with telecoms company ICO Global Communications before joining Aspen.
Before Curtin’s arrival, Aspen had no internal legal function. Curtin’s experience at ICO – which, like Aspen, was listed in Bermuda – “was a big motivation” for his hire. He adds: “They’ve also realised that there are a lot of aspects of the business where it’s useful to have a lawyer in-house.”
Since coming to Aspen, Curtin has added three lawyers to his team. One provides support for him in London, another is based in Bermuda and the last practises in Boston. It is likely that, in the future, more legal staff will be required for this $1.6bn (£850m) business.
Curtin’s immediate concern on joining the company was its imminent IPO. Advising Aspen was its longstanding external US counsel LeBoeuf Lamb Greene & MacRae. Curtin describes the firm as the “logical choice” for the work, due to its industry knowledge and regulatory expertise.
The company faced heavy Securities and Exchange Commission (SEC) requirements upon listing, which were further complicated by its history. Aspen was formed by Wellington Underwriting as a reinsurance arm in May 2002 before it changed its name to Aspen, which meant that relationship had to be taken into account.
“There are a huge number of disclosures that are required,” says Curtin. “Part of our problem was that we didn’t just come to life out of nothing. One of the issues we had to deal with was how much the SEC wanted us to disclose about Wellington’s historical data.” Since the successful IPO, which raised $245m (£130.7m), Curtin has been kept busy with related work. A note offering in August 2004 raised a further $250m (£133.4m), and in March this year shareholders sold 7.8 million shares in a secondary offering.
Curtin welcomes the share movement, saying: “It’s a good thing. This kind of deal will provide a more liquid trading market.”
LeBoeuf has acted on all of the stock exchange transactions, with partner Michael Groll in the New York office and London-based Joe Ferraro acting as the liaisons.
When it comes to UK law, Curtin turns to Norton Rose, where the relationship partners are corporate insurance head James Bateson and Cheryl Ronaldson. The firm provides Aspen with “a broad range of services”, including corporate, employment and pensions advice.
However, as yet Curtin’s work has been principally corporate finance, which fits neatly with his prior experience and regulatory issues. “To get our US operations underway has been a huge amount of work,” Curtin says, citing the differences between the way insurance is regulated in the US and the UK.
He adds: “US regulators are slightly more formal. There are a lot more filings to be made. The FSA [Financial Services Authority] has a cooperative approach where you meet with them to discuss issues – I think they get as much or more information by the way they handle it.”
Returning to Spitzer, Curtin thinks that the insurance industry is becoming rapidly more transparent. Contracts are now a bigger part of writing a risk, whereas before they would be drawn up months after the risk was taken on.
“That may sound like a small thing, but it’s a very big change and it’s something that people are taking very seriously,” Curtin says. “The whole point is that people know at the time of inception what the deal is and what’s going on.”
When it comes to Aspen, Curtin is very clear where the company is at: growing quickly in a “complicated and unique business”. But he relishes the challenges ahead, whatever the future brings.
|General counsel||David Curtin|
|Reporting to||Chief executive officer Christopher O’Kane|
|Main law firms||LeBoeuf Lamb Greene & MacRae and Norton Rose|