Case Details

Year Initiated/Committed

2007

Year Resolved

2007

Settlement Amount

$6 million

Court

Multnomah County Court, Oregon

Docket Number

n/a

Lead State

OR

Participating States

DC, FL, HI, MA, MD, MI, OR, PA, TX, WV

Defendant(s)

The Travelers Companies, Inc.

Case Description

Plaintiff states filed identical complaints and consent orders in their respective state courts. See case listings under other settling states. The complaint alleged that Travelers
participated in a bid rigging scheme in which broker Marsh & McLennan predesignated which insurance company’s bid would ‘win’ a particular account. To create the appearance of a competitive bidding process, Marsh would instruct certain insurers to submit inflated, intentionally uncompetitive bids. These schemes gave commercial policyholders, including large and small companies, nonprofit organizations, and public entities, the impression that they were receiving the most competitive commercial premiums available, when they were actually being overcharged.
Additionally, Travelers was involved with a ‘pay-to-play’ arrangement centered on their payment of contingent commissions, in addition to standard commissions and fees, to insurance brokers. Contingent commissions, often undisclosed to consumers, provided an incentive for brokers to steer business to the insurer who offered the most lucrative contingent commissions, often violating their duty to their clients’ interests. States settled for $6 million plus injunctive relief mandating disclosure of types and amounts of compensation.