NU Online News Service, May 11, 2:03 p.m. EDT
Marsh & McLennan Companies Inc. will pay the state of Connecticut $2.4 million to settle allegations of bid-rigging, price-fixing and illegally steering business to insurers who wrote policies for public, private and nonprofit entities throughout the state.
Connecticut Attorney General Richard Blumenthal announced the agreement last week which ends its suit against MMC.
"This settlement–long sought and hard fought–provides money to Connecticut taxpayers for a pervasive scheme that raised insurance prices," Mr. Blumenthal said in a statement. "Marsh masterminded a pay-to-play conspiracy of kickbacks and bid-rigging that inflated insurance costs for consumers and injured competition."
The attorney general said his office initially sued Marsh, the insurance brokerage subsidiary of New York-based services firm MMC, and ACE Financial Solutions over payment of a $50,000 commission in return for the broker steering an $80 million contract with the Department of Administrative Services.
Mr. Blumenthal said the suit was expanded after an investigation revealed that other public, private and nonprofit entities in the state were also harmed by Marsh's practice. The attorney general said Marsh "frequently decided which insurer should be given the business and at what price," and that the prices were substantially more at renewal–as much as 15-to-20 percent.
Under the agreement, MMC admitted no wrongdoing. The state also does not forgo its involvement in any multistate settlement agreements between brokers and insurers over allegations of kickbacks.
MMC released a statement saying, "We are pleased to have resolved this matter, which relates to events dating back to 2004 and earlier. Marsh vigorously contested the allegations against it throughout the course of the litigation, and the state has agreed to withdraw the lawsuit as part of the settlement. The settlement makes no findings against Marsh, includes no fines or penalties, and expressly does not include any admission of liability by the company."
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