Three states have ended their investigation of Brown & Brown's contingency fee program with no action taken, the company reported.
In a Securities and Exchange Commission filing, the Daytona Beach, Fla.-based insurance broker said insurance regulators in Arizona, Virginia and Washington have ended their investigations of Brown & Brown's offices in those states. The filing said no action was taken.
The broker received requests for information from insurance offices in Arkansas, California, Florida, Nevada, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Texas, and Vermont. Attorney's general in Connecticut, Florida, Illinois, New York, North Carolina and West Virginia have also either requested information or sent subpoenas.
The inquiries stem from allegations made in 2004 against Marsh & McLennan Companies that insurance brokers at its subsidiary Marsh engaged in steering of insurance contracts, bid rigging and receiving kickbacks in exchange for lucrative, volume based contingent commissions from carriers.
Five brokers, including Marsh have either ended taking the commissions or stopped taking some of the commissions, paying millions of dollars to clients affected by the practice.
Brown & Brown noted in this, and in past filings, that its own internal investigation has uncovered questionable practices by some individual brokers. The issues, the filing said, have been resolved or are being resolved on a case-by-case basis.
It added that the amounts of money spent to resolve these matters have not been material, but there is "no assurance that the ultimate cost and ramifications to resolving these matters will not have a material adverse effect on the company."
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