(Washington, DC) - District of Columbia Attorney General Linda Singer today announced that the District has entered into a settlement agreement with ACE, a large insurance carrier that joined an alleged bid-rigging and price fixing scheme devised by insurance broker Marsh & McLennan.
The scheme involved insurers providing sham bids to insurance customers. The customers were misled into believing they were receiving competitive bids. Insurers such as ACE earned a preferred status on bidding to customers by paying hidden “contingency commissions” to insurance brokers. The insurers failed to disclose those payments to policyholder customers.
In a filing today in DC Superior Court, ACE Group Holdings, Inc., and its subsidiaries agreed, without admitting liability, to comprehensive injunctive relief, including the disclosure of compensation ACE pays to insurance brokers. ACE also agreed to pay a multi-state task force $4.5 million in settlement of the states’ claims. A portion of this amount, approximately $100,000, was paid to the District of Columbia.
“Insurance customers deserve to receive honest, competitive bids from insurance companies, not sham bids cooked up by insurance brokers and their insurance company buddies” Attorney General Singer said. “The relief ACE has agreed to today should stop ACE from participating in such illegal schemes. We are pleased that ACE has decided to cooperate in resolving this matter.”
ACE has cooperated with the multi-state task force that investigated its behavior, and agreed to provide assistance to the states and the District of Columbia as they continue their investigation. The multi-state task force was led by Texas, and includes Florida, Hawaii, Maryland, Massachusetts, Michigan, Oregon, West Virginia and the District of Columbia.
The case is being handled by Senior Assistant Attorney General Don Resnikoff and Assistant Attorney General Susan Phan.