The Chubb Corp. entered into a settlement agreement with the Attorneys General of New York, Connecticut and Illinois to resolve an investigation of customer steering, improper finite reinsurance transactions, and other unlawful industry practices. Under terms of the settlement, Chubb agreed to discontinue paying contingent commissions on all insurance lines in the United States beginning in 2007. The company also agreed to contribute $15 million to a settlement fund as well as an additional $2 million to help defray the costs of the investigation by the Attorneys General.
Chubb was not assessed any fine or penalty in connection with this settlement, but acknowledged that it appears to have unknowingly benefited from the bid-rigging activities of others in the excess casualty market, which may have provided the company with an advantage in retaining renewal business.
Chubb says it will replace contingent commissions with a supplemental compensation program “in a manner consistent with evolving marketplace standards and reforms urged by the attorneys general.”
Topics Chubb
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