Popular Searches:  AIG  china  sunamerica+aig  LIFE  financial  health

The Hartford Settles for $1.3M in Price-Fixing Suit

 

Saturday, Oct 24,2009, 4:23:01 PM   Click:

The Hartford will pay $1.3 million to settle allegations over its role in a scheme to improperly inflate insurance and reinsurance prices nationwide by more than a third, Connecticut Attorney General Richard Blumenthal said.

Blumenthal said the antitrust settlement is the first of its kind in the reinsurance industry. The allegations stem from Blumenthal's ongoing litigation against Guy Carpenter & Co. -- one of the world's largest reinsurance brokers and a division of Marsh & McLennan -- over practices like pay-to-play and price collusion between insurers and brokers.

Blumenthal says The Hartford's cooperation gives him greater ammunition in his suit against Guy Carpenter, which he calls the "ringleader."

"More than money, The Hartford has provided my office with critical cooperation and information necessary to stop a culture of collusion in the multi-billion dollar reinsurance industry," Blumenthal said. "The Hartford has cooperated with my industry-wide reinsurance investigation -- particularly involving Guy Carpenter."

The Hartford's reinsurance division, Hart Re, ceased selling reinsurance in 2003.

"The Hartford is cooperating to pursue money back from conspirators who raised premiums by up to 40 percent for thousands of consumers in Connecticut and nationwide," Blumenthal said. "The Hartford's settlement advances our action against the ringleader, Guy Carpenter, (which) masterminded and orchestrated a shifty coterie of more than 20 co-conspirator companies in illegal price-fixing."

The suit against Guy Carpenter was filed in 2007. Blumenthal alleges that the company conspired with dozens of reinsurers to illegally inflate costs for insurance companies and consumers nationwide over several decades. Blumenthal claimed that The Hartford actively participated in the scheme from 1986 until 2001.

The suit alleges that Guy Carpenter enlisted companies in a widespread pay-to-play scheme through which Guy Carpenter would funnel lucrative business to select reinsurers in exchange for excessive fees and other benefits from these reinsurers.

Reinsurers agreed not to compete against the prices and terms set by Guy Carpenter in exchange for highly profitable business, Blumenthal alleges. Reinsurers who refused to participate were foreclosed access to potential business.

Guy Carpenter maintains that the Blumenthal's suit is "unfounded" and that the companies who participated in the reinsurance facilities brokered by the firm did so lawfully.

"These facilities result in improved terms and pricing of reinsurance for small- and mid-sized clients," the company said in a statement issued yesterday.

It's an argument that the company has made since the suit was filed in October 2007.

At the time, Guy Carpenter issued a press release saying "the Connecticut Attorney General's complaint is based on a fundamental misunderstanding of reinsurance facilities that have been in operation for the benefit of small- and mid-sized clients for as long as 50 years. As many of our clients have confirmed during this investigation, these facilities result in improved availability and terms of reinsurance and ultimately benefit insurance buyers. Simply put, there is no basis for the Attorney General's lawsuit and we intend to defend ourselves vigorously."

  • Print

You may also be interested in:

Discuss this news

Click Here to see all comments
Please aware of self to obey the Internet related policy laws and strictly forbid to release porn, violence.
Appraisal:

Name:

Email:

Content:

Featured

NEW YORK--(BUSINESS WIRE)-- Anthony J. Nugent, executive vice president, employee benefits sales, for MetLife, Inc. (NYSE: MET), will present at the Wachovia Securities 19th Annual Mid-Year Equity

MetLife Executive to Speak at Wachovia Conference

NEW YORK--(BUSINESS WIRE)-- Anthony J. Nugent, executive vice president,

Alltrust Insurance Company of China Ltd. recently gained approval from the China Insurance Regulatory Commission, the top Chinese insurance regulator, to expand registered capital by CNY 250 million.

Alltrust Insurance to Expand Registered Capital to

Alltrust Insurance Company of China Ltd. recently gained approval from the

TALLAHASSEE - Florida moved a little closer to reducing its financial vulnerability to hurricanes on Tuesday, although critics warned that the taxpayers and insurance policyholders remain liable for

In a Quiet Storm Season, State Debates Insurance

TALLAHASSEE - Florida moved a little closer to reducing its financial

Despite half of health plans in Michigan recording lower net profit in 2008 than the previous year, 10 of the largest overall profits rose an average 11.7 percent to $ 183.8 million from $ 164.6

Some of some of the largest HMO Manage To increase

Despite half of health plans in Michigan recording lower net profit in 2008

Copyright: Business Wire Source: Business Wire Wordcount: DUBLIN--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/2cb6f8/private_healthcare) has announced the

Research and Markets: private health care in Central

Copyright: Business Wire Source: Business Wire Wordcount: DUBLIN--(BUSINESS

NEW YORK--(BUSINESS WIRE)-- The National Underwriter Company, the leading publisher of print, e-media and software products for the insurance and financial services industries, announced today the

National Underwriter Company Launches CFO Dialogues

NEW YORK--(BUSINESS WIRE)-- The National Underwriter Company, the leading

DUBLIN, Ireland--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/5c40f8/european_markets_f) has announced the addition of Frost Sullivan's new report European

Research and Markets: European markets for claims

DUBLIN, Ireland--(BUSINESS WIRE)-- Research and Markets

MOST POPULAR