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Pay to Play Insurance

Miami, FL: (Oct-25-07) Florida Attorney General Bill McCollum and nine other states brought charges against Ace Ltd., a Hamilton, Bermuda, insurance holding company, alleging that company officials were involved in a "pay to play" scandal with other insurance brokers. The charges asserted that ACE had conspired with other insurance brokers after it came to light that officials submitted fake bids to create the illusion of a competitive bidding process. This was done even though the broker had already determined which insurer would receive a particular policyholder's business.

As part of a settlement reached, Florida Attorney General Bill McCollum and Florida Chief Financial Officer Alex Sink said Florida and eight other states have reached a $4.5 million settlement with the company, resolving the lawsuit. Under the deal, ACE will pay a multi-state task force to resolve allegations of bid-rigging and price-fixing in the commercial insurance market that resulted in higher premiums being paid by Florida governmental entities, companies and nonprofit organizations. [CNN NEWS: INSURANCE SCANDAL]

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Published on Oct-28-07


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