Ohio Attorney General Richard Cordray won a round in early April in his lawsuit alleging insurance companies and brokers conspired to fix commercial casualty insurance prices during a period extending from 2001 to 2004.
American International Group Inc. has agreed to pay $9 million to settle the antitrust lawsuit.
The state’s complaint against other defendants, including Marsh, a unit of Ace Ltd., Chubb Corp. and The Hartford Financial Services Group Inc., is still pending in Cuyahoga County Common Pleas Court. It alleges that the insurers and Marsh agreed to provide customers with fictitious quotes creating the false impression that competitive bidding had produced the best possible price, according to Reuters.
“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 released by his office. He also implied the litigation is far from over, stating, “We will continue to aggressively pursue our claims against the remaining defendants in this case.”
As part of the settlement with AIG, 26 public entities throughout the state — including universities, schools and cities — will receive reimbursements. More than $3 million of the settlement is expected to be distributed soon; around $4 million will be put aside in a fund that will be distributed by the court once the antitrust case has been completely resolved. The rest of the money will go to the state’s Antitrust Revolving Fund for antitrust enforcement; to the Ohio Attorney General’s office for litigation costs; and to the Ohio Department of Insurance for investigative costs.
AIG admitted no wrongdoing in the settlement agreement.
In a completely separate case, Cordray is representing several Ohio public pension funds as lead plaintiff in class-action securities fraud litigation against AIG. That case seeks to recover millions in pension dollars lost as a result of alleged anti-competitive practices, such as market division through the use of undisclosed contingent commissions and bid-rigging, as well as alleged accounting fraud. Prosecution of the securities lawsuit remains ongoing.
In the past few years, Cordray has reached settlements in other cases involving AIG: a $97.5 million settlement with AIG’s auditors; and a $115 million settlement with former AIG CEO Hank Greenberg and certain related defendants, for a total of $284.5 million.
The main defendant left in the securities case is AIG, according to Cordray.
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