Zurich American Insurance Co. settles bid-rigging lawsuit

By Hubert Vigilla

Published on March 22, 2006

This settlement marks the first time that law enforcement officials and insurance regulators have forced an insurance provider to cease such actions. As a result of this settlement, policyholders in the nine states will receive more than $150 million in refunds. Zurich American Insurance Co. will pay each of the states an additional $20 million to cover investigative fees and costs.

The multi-state investigation alleged that Zurich American Insurance Co. concealed its practice of paying contingent commissions to insurance brokers and that the company conspired with insurance brokers to overcharge businesses for insurance policies.

In addition to paying the multi-million dollar settlement, Zurich American Insurance Co. agreed to reform their business policies, stating that the company will provide its policyholders with information about commissions and will implement a monitoring program to ensure ethical business practices.

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