The multistate settlement resolves claims that AIG participated in deceptive insurance bid-rigging, price-fixing and other schemes in the commercial insurance market. Marsh & McLennan devised the scheme to mislead large and small companies, nonprofit organizations and public entities into believing they were receiving the most competitive commercial premiums available.
The settlement requires AIG to reform its business practices, including disclosing to its customers the precise amount of compensation it pays to insurance brokers. Texas also alleged that AIG entered into an illegal agreement not to compete against Allied World Assurance Co., another surplus lines property and casualty insurer. That scheme resulted in an unreasonable restraint of trade. The other states did not elect to bring those charges against AIG. AIG also paid Texas $500,000 to satisfy the Attorney General’s concerns about this conduct. AIG paid a total of $13 million to reimburse costs and reimbursement of claims brought under the Texas Free Enterprise and Antitrust Act.