ACE to Seek Dismissal of Connecticut AG’s Lawsuit

February 3, 2005

ACE Insurance said it will seek dismissal of the lawsuit brought against it by Connecitcut Attorney General Richard Blumenthal for allegedly paying a secret commission to win a state contract.

ACE CEO Evan Greenberg said that the company has investigated the charge and “believes it is without merit” and will proceed to file a motion to dismiss the suit. Greenberg revealed the move during a conference call with analysts.

Connecicut AG Blumenthal last month sued ACE and insurance broker Marsh & McLennan Inc. for a scheme in which ACE allegedly paid Marsh a secret $50,000 commission to steer an $80 million state contract to the company.

Blumenthal’s office said it was also investigating whether ACE may have paid additional illegal commissions to Marsh in the deal.

According to Blumenthal, Marsh never told the Department of Administrative Services, which paid the company $100,000 to act as its advisor on the contact, about the $50,000 or any additional payments. Marsh reportedly solicited and accepted the $50,000 commission, even though the DAS clearly expected the company to accept no additional fees.

The attorney general’s action seeks actual and punitive damages, information allowing determination of how much Marsh was falsely paid and reimbursement for legal and investigative expenses.

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