Munich Re’s primary insurance division rewarded top-performing agents with prostitutes at a party in Budapest,Hungary, according to a report by German newspaper Handelsblatt.

Senior executives at Ergo, Germany’s second-largest primary insurer, arranged a party to reward highly-performing agents in summer 2007 and invited around 20 prostitutes. The party, for 100 guests, was held at the Gellert Spa in Budapest.

The executives responsible for organising the party are no longer with the company.

According to Handelsblatt, the women wore colour-coded armbands: red for hostesses, yellow indicating they were available for sexual favours, and white signifying those reserved for top agents and executives.

Ergo's spokesperson Dr. Alexander Becker said the company has taken measures to prevent similiar incidents but hasn't ruled out taking further action.

"At the moment we are in the process of digging deeper into these allegations we have been confronted with. If we find things that would necessitate further action, that our existing rules were not sufficient enough to prevent something we would like to prevent, then we will introduce more measures," said Becker.