American International Group, Inc. (AIG) has confirmed that it has reached settlements with nine states and the District of Columbia relating to their investigations into alleged bid-rigging and price-fixing and questions about undisclosed contingent commissions paid to brokers. Under the settlement agreements, AIG denies the states’ allegations that some of its subsidiaries were involved in a “pay-to-play” tactic used by Marsh & McLennan and other insurance brokers that purportedly caused businesses to pay higher insurance premiums. AIG has not admitted any liability related to these charges. AIG said it agreed to settle to “avoid the expense and uncertainty of protracted litigation.”

The settlements, which are subject to court approvals, were reached with the attorneys general of Florida, Hawaii, Maryland, Michigan, Oregon, Texas and West Virginia, the Commonwealths of Massachusetts and Pennsylvania, and the District of Columbia; the Florida Department of Financial Services; and the Florida Office of Insurance Regulation. The settlements call for total payments of $12.5 million to be allocated among the 10 jurisdictions.

AIG Pays $12.5M to Settle Bid-Rigging Allegations (Insurance Journal 1/29/08)

February 6, 2008