NU Online News Service, Oct. 28, 3:03 p.m.EDT

Connecticut officials say they reached a $1.7 million settlementwith a Boston-based insurance broker over allegations that thebroker failed to provide proper information to its customers aboutcommissions and overcharged them in the process.

Connecticut Insurance Commissioner Thomas B. Leonardi andAttorney General George Jepsen say William Gallagher Associates,Inc., (WGA) overcharged Milford Power Company, LLC, millions ofdollars over several years, violating the state's Unfair InsurancePractices Act and Unfair Trade Practices Act in its dealings.

WGA is not affiliated with the Itasca, Ill.-based insurance firmArthur J. Gallagher.

Under the terms of the agreement, the company does not admitwrongdoing, but will pay the state $100,000 in civil penalties andforfeit $1.6 million to be deposited in the state's generalfund.

In 2007 WGA reached a settlement of close to $4 million withMassachusetts officials over similar allegations involving 700 customers.

Connecticut officials note that the 2007 agreement providedrestitution to WGA clients including Milford Power.

"Deceptive business practices will not be tolerated inConnecticut. Clients deserve honest answers and good faith dealingswhen they trust others with their money," Leonardi says in astatement. "Any company or individual who violates that trust willbe held accountable."

Jepsen adds, "The conduct in this case was particularlyegregious, warranting a separate prosecution and settlement inConnecticut. The company knew that it was violating Connecticut lawwhile engaging in this conduct and took steps not only to hide itfrom its clients, but also from the state. Under this agreement,WGA will forfeit nearly all of the unlawfully obtained overchargesnot already returned."

Conn. official say WGA concealed certain fees and commissions,issued dummy invoices, altered original policies and kept two setsof books to conceal the practice. They say the questionablebookkeeping and billing practices dated back to 2002, resulting inMilford Power allegedly being overcharged more than $2 million.

Officials allege that when the insurance department asked thecompany in 2004 about WGA's alleged actions, the firm "did notrespond completely and accurately" to the department's inquiry.

A representative with WGA declined to comment.

However, in the 2007 settlement, WGA issued a statement sayingthat it would apologize for its actions and knowledge of practiceabout from its own internal investigation. It adds that the threeemployees involved in the practice left the company in 2005.