American International Group Inc. will pay $9 million to settle an Ohio antitrust lawsuit accusing it of conspiring to fix commercial casualty insurance prices.
Ohio Attorney General Richard Cordray had accused AIG and other insurers of conspiring with insurance broker Marsh & McLennan Cos to provide fake price quotations to mislead customers into believing that competitive bidding had resulted in the best prices. He said the alleged illegal activity took place from 2001 to 2004.
“The scam in play here is yet another example of the all-consuming corporate greed that has been so prevalent on Wall Street,” Cordray said in a statement. The $9 million will be distributed to 26 cities, school systems, universities and other public entities throughout Ohio.
AIG spokesman Mark Herr said the New York-based insurer settled to avoid the cost and uncertainty of litigation. The company did not admit wrongdoing.
Cordray said his case continues against other defendants including Marsh, a unit of Ace Ltd., Chubb Corp. and Hartford Financial Services Group Inc. He said the case is pending in Cuyahoga County, Ohio Common Pleas Court.
Ace declined to comment, while the other companies did not immediately return calls for comment.
In November, Marsh agreed to pay $400 million to settle an investor lawsuit arising from the plunge in its stock price in November 2004, when New York Attorney General Eliot Spitzer unveiled an insurance bid-rigging probe. Ohio and New Jersey pension funds were lead plaintiffs in that class-action case.
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