ACE Group Holdings has agreed to pay $4.5 million to end a bid-rigging and price-fixing case, according to officials from eight states and the District of Columbia.
Florida’s Chief Financial Officer Alex Sink said ACE Group Holdings Inc. and its subsidiaries are paying the states to resolve allegations of bid-rigging and price-fixing in the commercial insurance market in their dealings with insurance broker Marsh & McLennan.
In addition to Florida, the states of Hawaii, Maryland, Massachusetts, Michigan, Oregon Texas and West Virginia and the District of Columbia participated in the investigation and settlement.
Florida’s Sink said the multi-state investigation revealed that ACE participated in fictitious quoting and steering of business and other schemes in the commercial insurance market, orchestrated by Marsh & McLennan. In the process, large and small companies, nonprofit organizations, and public entities that purchased commercial lines of insurance from ACE were misled into believing they were receiving the most competitive commercial premiums available, according to the CFO.
Prior to the settlement, ACE provided reimbursement to a nationwide group of policyholders and adopted business reforms that govern its bidding and underwriting practices.
Under the final judgment, ACE will be required to abide by those reforms and, upon the request of its customers, disclose the actual payments made to brokers.
ACE said it has cooperated with the multi-state task force and will provide assistance to the states as they continue their investigation.
According to Sink, this settlement marks the second agreement Florida has reached with insurance carriers involved with large insurance broker Marsh & McLennan and other insurance brokers using “pay-to-play” tactics.
It is also Oregon’s second such settlement.
Florida Insurance Commissioner Kevin McCarty said that the settlement is another step toward establishing a national standard for transparency in insurance transactions.
Topics Florida
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