The state’s estimated $8.7 billion deficit just got a little smaller Wednesday when Attorney General Richard Blumenthal announced a $2.4 million settlement with insurance broker Marsh & McLennan Companies, Inc.
The state sued Marsh & McLennan back in 2005 for its involvement in an alleged bid rigging, price fixing, and steering scheme. Blumenthal said major insurance companies would pay “secret commissions” to the insurance broker in order to get its business.
“Marsh was hired to find the best insurance coverage for its clients, but instead steered them to insurers who paid kickbacks,” Blumenthal said.
Some of the insurance companies that participated in the alleged kickback scheme include Zurich, Travelers, AIG and Liberty Mutual.
As a result of the settlement Blumenthal said consumers should see their insurance premiums go down because some of their premiums were helping to pay these “secret commissions.”
“These secret commissions were baked into insurance premiums,” Blumenthal said.
Some Connecticut businesses harmed by Marsh’s practices include Hubbell Inc., Kaman Corp., Hexcel Corp., and Bridgeport Hospital. The insurance broker also counted the state of Connecticut and a handful of cities and towns as its clients.
Blumenthal said the investigation into the insurance industry and these types of practices will continue.
Wedneday morning’s press conference was held in the parking lot outside the Attorney General’s office on Elm Street after a fire drill evacuated the building.