The Massachusetts attorney general has accused Great American Insurance Group of bid-rigging for what she says was a fake price quote it submitted in 2004 to a Norwood technology firm.
Attorney General Martha Coakley last week filed a lawsuit alleging that in 2004 Great American conspired with insurance broker Marsh & McLennan to submit a $450,000 quote to Analog Devices Inc. so that another insurer’s $400,000 bid would appear competitive.
Great American has shot back, claiming its actions have been lawful and that it has tried to reach an out-of-court resolution, but that the attorney general has been “unreasonable” in her demands surrounding this incident. It is vowing to “vigorously defend” itself against the lawsuit.
The lawsuit alleges that Marsh steered another one of Analog Devices’ insurance policies to Great American at a predetermined price of $60,000 to reward the insurer for submitting the allegedly inflated quote.
Coakley says Great American aided Marsh by paying it contingent commissions based on the volume of business it placed with the insurer.
Great American said it is “disappointed” that Coakley has filed suit regarding one quotation and the commissions,
“Great American denies wrongdoing and denies the allegations of the attorney general’s suit. Great American’s conduct in issuing that quote was lawful,” the company said in a statement.
The Cincinnati-based specialty commercial lines insurer said it has “cooperated with the attorney general’s investigation and has tried for an extended period of time to reach resolution of the issue without litigation. Great American already has directly resolved and been released from any potential issue with the corporate entity relevant to the one quote that is the subject of the attorney general’s suit. But Great American believes that the demands of the attorney general’s office have been unreasonable. Thus, the company intends to vigorously defend itself against the attorney general’s allegations.”
Coakley’s suit seeks civil penalties and restitution as well as a court order barring Great American from unfair and deceptive practices.
The lawsuit names Great American as a defendant, along with Professional Risk Brokers Inc., a Great American subsidiary.
Marsh is not named as a defendant, but Marsh paid $850 million to settle similar allegations of bid-rigging and account-steering in New York.
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