The market conduct examination was undertaken to evaluate Beacon's compliance with laws and insurance regulations. It also set out to determine whether Rhode Island employers and claimants were being treated equitably.

The state exam began in September 2005 as a routine market-conduct review, and expanded.

Investigators found Beacon spent more than $1.1 million on golf-related events, clothing from 2003 through 2005 that that "these expendutiures benefited Solomon and David Clark.

Here's the breakdown:

* More than $540,000 paid to a Massachusetts golf club for a corporate membership where Beacon senior management "entertained select agents and other guests." The amount included the cost of certain functions "where Beacon's sponsorship was kept private and the benefit to Beacon was unclear," the report says.

* More than $340,000 paid to a Rhode Island country club, including $203,000 paid to the pro-shop for merchandise.

* About $110,000 incurred by Beacon releated to golf trips that senior management and selected agents took to Florida, Scotland, California, North Carolina, and Wisconsin. The trip to Scotland alone cost $34,000.

* At least $20,000 was paid "to support the PGA career of an agent's son."

* From 2003 through 2005, Beacon paid $1.1 million to charitable organizations.

The investigation found Solomon approved a $25,000 payment to a hospital in December 2005 that the Board of Directors had not approved. Solomon was corporate chairman for a charity event and his wife was on the board of trustees of the organization.

Senior management members got other perks.

* Solomon was provided a leased corporate car under his employment contract. Beacon payments for a Lexus and a Volvo over from 2003 through 2005 came to about $50,000.

"Solomon also authorized Beacon to buy a Lexus vehcile that was previously leased fro him, and then to immediately sell the car to a Beacon vice president," the report says. Beacon sold the car tot eh vice president for $11,363 less than it cost Beacon, and the price difference was not included as income on the vice president's tax forms.

* Solomon paid for club memberships in addition to the corporate country club membership, for several senior managers. The report found $41,000 in payments related to the club memberships.

State law makes it illegal for someone to knowingly give false information to the Department of Business and Regulation.

"We found one instance where Beacon underwriting management instructed underwriting personnel to create and backdate a document to be provided to [the Department of Business and Regulation] as part of the examination," the examination says.

A separate study, commissioned by Beacon and conducted by consultants from a company of New York City's former mayor, Rudolph Giuliani, was released last April. The Giuliani report concluded that Beacon had given preferential rates to some companies and maintained "inappropriate relationships" with certain insurance agents.

In the past 1½ years, Beacon has fired its former CEO and chief of underwriting and accepted the resignations of several board members who had served since the nonprofit mutual insurer was formed by an act of the General Assembly in the early 1990s.

Beacon's former board chairman, Sheldon S. Sollosy, resigned in February 2006, after an internal audit conducted by Beacon named Sollosy as refusing to cooperate with the auditors looking into allegations that Beacon was unfairly discounting insurance rates for companies with connections to Beacon's board.

A statewide grand jury last October indicted Beacon's former chief of underwriting, David R. Clark, of conspiracy and insurance fraud in what was described as a widening criminal probe of the company.

Last January, the board hired Rosati -- a former executive at Old Stone Bank with Carcieri -- to be the new president and CEO. Rosati replaced Joseph A. Solomon, whom the board fired early last year amid an ongoing criminal probe of alleged price breaks given to certain companies and "inappropriate relationships" with certain insurance agents.