NEW YORK (Reuters) ? Ace Ltd. expects growth to continue throughout the year, chief executive Evan Greenberg said yesterday, a day after the insurance company reported record first-quarter earnings.

Ace also said it will pay $80 million and pledged to adopt business reforms as part of a regulatory settlement with three states ? New York, Connecticut and Illinois ? to settle charges of bid-rigging.

Greenberg told investors on a conference call that his Bermuda-based company had already adjusted its business practices in early 2005 and that the settlement ?imposed no additional restrictions and is in line with what we are already doing?.

On Tuesday Ace said its first quarter net income was $489 million or $1.46 a share, a record. It included the $80 million pretax charge for the settlement.

Greenberg said he was looking forward to working with other states and the US Securities and Exchange Commission to settle their charges. He said he couldn?t predict when a settlement with the SEC would take place.

Greenberg said he was reducing Ace?s exposure to catastrophes such as hurricanes. By July he hoped to reduce the company?s potential losses from wind exposure by a range of 40 percent to 50 percent in the US.

?We are staring down the barrel of a gun at a very active wind season,? he said.

Last year?s hurricanes cost the property casualty insurance industry $58 billion.

The Ace chief executive said he was taking similar action with earthquake exposure, including on the ?New Madrid? fault in the Mississippi Valley.

Ace has increased its reinsurance coverage in the US to $750 million to $800 million from about $550 million in 2005. Ace is itself a reinsurer ? a provider of backup coverage for property casualty insurers in event of major catastrophes. But Ace also buys catastrophe coverage for many of its products.

?In both the US and London, property rates are continuing to tighten,? said Greenberg. Reinsurance rates were going up, as were energy and marine insurance. The market for small and mid-sized non-catastrophe markets were softening, and Ace was ?shedding volume? in areas that were too competitive, he said.

While the company was shrinking coverage in some areas, rate increases were more than making up for the loss of volume. ?The quality of revenue is improving,? Greenberg said.

Greenberg said the company?s exposure to asbestos claims, particularly lung ailments, seemed to be under control.

Ace?s shares closed up 1.45 cents to $54.45 on the New York Stock Exchange as investors apparently welcomed the settlement and the company?s strong results.