Daniel Aronowitz testifying June 5 at a Senate Health, Education, Labor and Pensions Committee confirmation hearing. Credit: Senate HELP
The U.S. Office of Government Ethics has posted an ethics agreement letter for Daniel Aronowitz, the nominee to be the assistant Labor secretary who serves as administrator of the Employee Benefits Security Administration.
Related: Senate committee backs nomination of Daniel Aronowitz to lead federal benefits agency
As the EBSA administrator, Aronowitz would be in charge of a Labor Department agency directly involved with setting and enforcing rules governing employer-sponsored health plans, retirement plans and other benefit plans and programs.
Aronowitz is a longtime labor lawyer, a frequent benefits law blogger and the past president of an Ullico subsidiary, Ullico Casualty.
In 2011, he became the managing principal of and a founder of Euclid Specialty Managers, a Vienna, Virginia-based firm that sold fiduciary liability insurance to multiemployer employee benefit funds, governmental employee benefit funds and other nonprofit employee benefit funds. Euclid Specialty reported in 2020 that the firm was part of a family of underwriting companies that was writing about $200 million in professional liability premiums.
The earnout payment: For the benefits community, one takeaway from the posting of the Aronowitz ethics agreement letter is the possibility that the nomination could be heading to the Senate floor for a confirmation vote soon.
Another highlight of the letter, which is dated April 16, 2025, is a hint about just how big Euclid Specialty was.
Specialty Program Group, an arm of Hub International, acquired Euclid in 2023. Euclid then changed its name to Encore.
Hub, Specialty Program Group and Euclid did not disclose the terms of the transaction, but the Aronowitz ethics agreement letter implies that the transaction was large: Aronowitz said in the ethics agreement letter that he's on track to receive "approximately 44% of the $42,700,000 earnout payment," or $19 million, from Specialty Program Group.
An earnout payment is a deferred acquisition payment. The buyer uses the deferred payment to give the people selling a company an incentive to make it successful.
The Specialty Program Group-Euclid earnout payment agreement was part of a December 2022 sales agreement. The size of the payment was based on the performance of Encore in the two years before Dec. 31, 2024.
Health insurer holdings: The Aronowitz ethics agreement letter also shows that Aronowitz expects to divest his interests in a large investment portfolio that includes stocks and debt securities issued by many different companies, including the stock Cigna and UnitedHealth and debt securities issued by Aetna parent CVS Health.
Crypto: Aronowitz noted that he will also divest his interests in Bitcoin and Ethereum virtual currency held in a Coinbase wallet.
Executive positions: Aronowitz said he will resign from his position at Encore upon confirmation and sell his vested restricted stock in Hub back to Hub.
"I will forfeit any restricted stock that is unvested as of the date of my separation," he said.
He acknowledged in the ethics letter agreement that the agreement would be posted publicly.
Members of the Senate Health, Education, Labor and Pensions Committee backed his nomination by a 14-9 vote June 5.
Aronowitz could not immediately be reached for comment on the ethics agreement letter.
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