State alleged that Acordia conspired with several insurance companies to steer customers to them in exchange for secret payments. Acordia’s top management, including its then-CEO, is alleged to have actively participated in the scheme. The complaint also alleged that Wells Fargo participated directly in Acordia’s fraud.
The lawsuit, filed in Connecticut Superior Court in Hartford, sought restitution for the companies’ customers, disgorgement of illegal profits, and penalties. Illinois and New York filed parallel suits on the same day.
After a bench trial, the court determined that although individual brokers did not harm their clients’ interests because they were not aware of the contingent fee arrangement, Acordia nonetheless had a duty to disclose the contingent commissions under the state’s Unfair Trade Practices Act, and the court sought information from the defendants as to how much more money had been earned by Acordia subsequent to the contingent commission program than had been earned before. The court declined to issue an injunction because the state’s law had changed since the conduct alleged in this case, and now required disclosure of contingent commissions.