NU Online News Service, Feb.24, 4:00 p.m.EST

Beecher Carlson brokerage has agreed to refund $90,000 toMassachusetts customers settling allegations it placed coveragewith insurers without telling clients that carriers were paying thefirm a commission in addition to client fees, it was announced.

Massachusetts Attorney General Martha Coakley said in astatement that this involved allegations that Atlanta-based BeecherCarlson accepted the hidden payments from carriers after Beecherhad already negotiated fee-based compensation agreements with itsclients.

"It is deceptive for insurance agents or brokers to enter intofee agreements with customers and also take undisclosed commissionpayments from insurance companies," said Attorney General Coakley,in a statement.

Such practices, she said, "unfairly inflate insurance costs forbusinesses and consumers and will not be tolerated inMassachusetts. However, we remain pleased that Beecher Carlsoncooperated from the outset with our review and agreed to makerestitution payments to affected customers."

Under the terms of the settlement, filed in Suffolk SuperiorCourt, Beecher will refund over $90,000 to seven customers,including three Massachusetts-based companies, and pay $25,000 tothe state.

Additionally, Beecher will reform its fee and commissionpractices so as to provide written disclosure of all compensationto its fee based customers.

The Attorney General's Office disclosed that it began its reviewof Beecher Carlson after some former employees of William GallagherAssociates joined Beecher.

Those employees had been involved in the hidden fee transactionsthat were part of the attorney general's December 2007 lawsuitagainst William Gallagher Associates Insurance Brokers Inc.

The AG's lawsuit against William Gallagher Associates allegedthat the company had charged its customers undisclosed fees bymisrepresenting those fees as insurance premiums, and that it hadtaken both fees and commissions on certain insuranceplacements.

The lawsuit was resolved in 2007 by a consent judgment thatrequired the company to return over $3.3 million to its customers,pay over $1 million to the Commonwealth, and adopt transparentcompensation practices going forward.

In the past three years, the AG's office noted it has broughtnearly a dozen cases relating to unfair and deceptive insurancecompensation practices.