More than 9,500 insurance clients of Aon Corp. in Washington are qualified to share $2.4 million in restitution as part of an agreement signed by Insurance Commissioner Mike Kreidler.
Kreidler said the restitution is part of an agreement with the national brokerage firm to settle allegations of misconduct and anti-competitive practices against the company that surfaced in the insurance industry’s widespread scandal of 2004.
He said that Aon clients — businesses, associations, individuals, government agencies and other entities — need to decide for themselves if the settlement offer is sufficient compensation for damages they might have suffered as a result of Aon’s alleged misconduct.
“We won’t offer case-by-case recommendations,” Kreidler said, “but our overall evaluation is that this is very comparable to last year’s Marsh settlement, and it provides a fair deal to Aon’s Washington clients.”
Kreidler’s reference was to Marsh & McLennan, the nation’s largest insurance broker that was the primary target of a scandal investigation launched in 2004 by New York Attorney General Eliot Spitzer, who charged that Marsh and other brokerage firms made improper payments, rigged bids and allowed other anti-competitive activities.
As in the Marsh settlement, Aon neither disputes the allegations, nor admits them in the agreement. The settlement covers the period between Jan. 1, 2001 through Dec. 31, 2004. Individual settlement amounts available to Washington policyholders range from $71,234 to amounts of less than $10. Clients who accept the settlement must sign a release forfeiting the right to pursue any claims against Aon related to the misconduct and anti-competitive practices. Clients who elect not to accept the settlement can pursue legal remedies.
In the aftermath of the Marsh investigation, Kreidler issued a strongly worded technical assistance advisory, reminding Washington’s licensed brokers and insurance companies of their duties and responsibilities to insured parties.
Kreidler also launched a separate investigation in Washington, targeting top brokers and brokerage firms. The year-long investigation did not uncover criminal or unethical behavior, but it revealed minor violations where brokers were not disclosing compensation arrangements with consumers. The violations did not approach the magnitude or scope that was revealed at the national level.
The Office of the Insurance Commissioner is working with brokers and representative associations to ensure that compliance requirements are met.