$172M deal reached in insurance probe
DALLAS (AP) -- Zurich American Insurance Co. has agreed to pay nearly $172 million in a deal with nine states to settle allegations of bid-rigging and price-fixing in the commercial insurance market, state officials said Sunday.
Policyholders in all 50 states would receive $151.7 million in refunds, said Mark Tobey, a lawyer with the Texas Attorney General's office.
The U.S. unit of Zurich Financial Services will pay an additional $20 million to the nine states, including investigative costs, attorney fees and payments in lieu of civil penalties, said Tobey, who helped negotiate the deal.
The settlement is the latest in a broad investigation by state authorities into the practice of "contingent commissions" insurers paid brokers. Regulators say the commissions were part of a scheme between the companies and brokers to inflate premiums and overcharge commercial policyholders.
The states in the Zurich settlement are: California, Florida, Hawaii, Maryland, Massachusetts, Oregon, Pennsylvania, Texas and West Virginia.
Keith Owens, a spokesman for Zurich American, confirmed Sunday a settlement "to resolve inquiries related to insurance business practices." He said he had no further details.
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