State of Ohio v. American International Group, et al,, No. 07-633857 (Oh. Ct. of Comm. Pleas, Cuyahoga Cty. 2007)
Plaintiff state alleged bid-rigging and fictitious quotes in suit against insurance brokers and major commercial insurers. Settled on behalf of 26 public entities for $9 million (AIG) plus $4.75 million (Marsh). Other cases pending
Pennsylvania v. ACE Limited
Plaintiff state reached a settlement with ACE Limited in connection with ACE’s involvement with other insurers and brokers in a scheme to rig bids for excess casualty insurance. These illegal business practices occurred between 2000 and early 2004. In addition to the bid-rigging tactics, ACE also paid “contingent commissions,” which are payments that insurers pay to brokers and agents in addition to their base commissions. In exchange for the “contingent commissions,” brokers agreed to steer policies for excess casualty to ACE and increased premiums on existing policies. The agreement requires ACE to reform its business practices. Ace will now disclose to any client, who asks how much it is paying in compensation to a broker or non-exclusive agent on that client’s insurance business and will etablish a toll-free telephone number that policyholders can request disclosure of compensation information.
Connecticut v. Acordia (Super. Ct. Hartford Jud. Dist.)
State alleged that insurance companies were paying kickbacks to Acordia, an insurance broker, for steering business to the insurer.
People ex rel. Spitzer v. Acordia and Wells Fargo (NY Sup. Ct.)
State alleged that insurance companies were paying kickbacks to Acordia, an insurance broker, for steering business to the insurer.
Illinois v. Acordia (Cook County Circuit Court)
State alleged that insurance companies were paying kickbacks to Acordia, an insurance broker, for steering business to the insurer.
Connecticut, Illinois & New York v. St. Paul Travelers
Plaintiff states charged St. Paul Travelers with illegal business steering, customer allocation, and bid rigging in the market for small business. The states alleged, and St. Paul Travelers did not deny, that millions of dollars in “contingent commissions” were paid to a number of brokers who “steered” business to St. Paul Travelers. Under the customer allocation scheme, Travelers was one of the insurers (with The Hartford and CNA) who secretly agreed with a broker to divide up the brokers small business customers in exchange for paying greater undisclosed contingent commissions to the broker.
Ilinois v. Liberty Mutual Insurance Company
The state of Illinois alleged that Liberty Mutual particiated in scheme led by Marsh McLennan to rig bids on insurance policies and distribute policies to particpating insurers, who would submit high bids when directed to do so. The State also alleged that Liberty Mutual paid undisclosed contingent commissions (payments on top of regular commissions)to insurance brokers and agents to induce them to steer business to Liberty Mutual.
New York ex rel. Spitzer v. Hartford Financial Services Group
Agreement between CT, NY and Hartford in which Hartford agreed to pay $20 million in restitution and fines, and implement reforms designed to bring fair play and transparency to the marketing of retirement products. Agreement resolved charges that insurance companies were making secret payments to insurance brokers to recommend group annuities to pension plans.
Connecticut v. Liberty Mutual (Conn. Super. Ct. Hartford Div. 2006)
State alleged that from 2001 through 2004, Liberty Mutual conspired with Marsh, AIG, ACE, Zurich and other insurers to leverage Marsh’s significant market share in the excess casualty insurance market in particular to rig bids and raise premium prices on insurance contracts. Liberty Mutual settled in 2010 for $2 million.
Texas v. American International Group Inc., No. D-1-6v-08-000197 (98th Dist. 2007)
Ten states resolved claims that AIG, an insurer, had participated in a bid-rigging scheme run by Marsh McLennan, an insurance broker.
