Florida and eight other states have reached a nationwidesettlement of $171.7 million with Zurich American InsuranceCompany, the Florida state attorney general announcedyesterday.

Attorney General Charlie Crist said the settlement resolvesbid-rigging and price-fixing allegations against the firm.

Florida acted as a lead state in the investigation andsettlement process that also included Texas, California,Pennsylvania, Massachusetts, Hawaii, Maryland, Oregon and WestVirginia.

The National Association of Insurance Commissioners' BrokersActivities task force helped coordinate the investigation thatresulted in the settlement.

Michael McRaith, Illinois insurance director and task forcechairman, said the decision to join the settlement is subject tothe analysis of each state regulator.

In New York a spokesman for Attorney General Eliot Spitzer,whose office first surfaced charges of bid-rigging and steeringbetween commercial insurance brokers and carriers, said regardingZurich "the investigation is continuing."

ZAIC's parent firm Zurich Financial Services, in a statementreleased from corporate headquarters in Switzerland, said theagreement builds on the Memorandum of Understanding the carrierreached last October with plaintiffs in a nationwide class actionsuit that awarded $100 million for damages in U.S. District Courtin New Jersey. The multistate agreement adds $51 million to thatfigure along with $20 million for state fees and costs.

Zurich Chief Executive Officer James Schiro said that agreement"brings a greater sense of clarity and transparency to the quotingprocess for our customers in the U.S."

Since the bid-rigging activity first came to light in October of2004, both AIG and the major brokerages have settled similarcharges with New York and regulators in other jurisdictions.

ZAIC, it was charged, conspired with certain insurance brokersin a "pay-to-play" scheme which resulted in higher insurancepremiums being paid by commercial customers and governmentalentities.

As part of the scheme, Zurich submitted fake bids to create theillusion of a competitive bidding process, even though the brokerhad predetermined the winner, Mr. Crist said.

The carrier was rewarded by having other lucrative businesssteered to it and in turn paid contingent commissions to thebrokers, who did not disclose them to customers, Mr. Cristsaid.

Under the agreement, Zurich will repay policyholders across thenation approximately $151.7 million and will pay $20 million to theinvestigating states. Affected Florida policyholders will receiveapproximately $8 million under the settlement. The direct victimsof the bid-rigging scheme were companies, nonprofit organizationsand governmental entities that purchased commercial lines ofinsurance from Zurich.

Texas Attorney General Greg Abbott announced that Texascommercial policyholders would get about $11 million from thesettlement.

In addition to making restitution, ZAIC has agreed to disclosecontingent commission payments in the future and reform thecompany's business practices. The amount to be reimbursed toFlorida for its investigative costs is yet to be determined, theattorney general said.

The Florida Attorney General's Office continues to investigateother brokers and insurers who are believed to have engaged inthese schemes.

On March 14, the Florida attorney general filed a racketeeringand antitrust lawsuit against broker Marsh & McLennan CompaniesInc. over bid-rigging practices.

Among the carriers still under investigation in Florida are ACE,American International Group, Chubb, Munich American Re andHartford.

Mr. Crist's spokesperson JoAnn Carrin noted that Zurich will nowassist in the racketeering lawsuit against Marsh. "We think that aswe get more settlements that will help in the overall process," shesaid.

In addition to the major insurance brokers, who have announcedsimilar settlements with their states, American International Groupearly last month agreed to a settlement with New York that coveredinsurance brokerage practices.

Ms. Carrin said that while some Florida claimants will benefitfrom the New York settlement, she did not feel the funds availablewould provide full compensation.