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Case ID: 3676 | Insurance | 07/21/2005
A nationwide class action has been filed against insurance companies Marsh & McLennan Companies, Inc., Aon Corporation and its affiliates, and the Willis Group, on behalf of all persons who directly or indirectly engaged the defendants’ insurance brokerage services between August 26, 1994, and the present. The action alleges that the companies have conspired to fraudulently conceal that they have entered into placement service agreements with third-party insurance companies which pay them additional fees based on such factors as profitability, growth, and the volume of insurance the defendants place with the participating insurers, in violation of the federal Racketeer Influenced and Corrupt Organizations Act. The action seeks unspecified compensatory and triple punitive damages.
The action alleges that, under the brokers’ marketing scheme, they hold themselves out to the public as experts in the analysis and procurement of insurance to meet customers’ insurance needs. As brokers, the defendants’ first priority is to find for their customers the best coverage at the lowest cost. It is with the promise of unbiased brokerage advice that customers engage the defendants’ services, unaware that the defendants allegedly have previously-made agreements with certain insurers-- agreements that influence the brokers to steer customers to purchase coverage with those particular insurers, regardless of what is best for the customer. By steering customers to purchase insurance coverage with only those insurers with whom the defendants have placement service agreements, the brokers reap substantial additional fees-- all the while purporting to provide independent and unbiased brokerage advice. The lawsuit alleges that the brokers have actually entered into a conspiracy with other insurance brokerage firms, insurers and their affiliates, industry trade associations, and other entities to assure the secrecy and longevity of their profit-making racketeering. On January 31, 2005, a settlement was announced between Marsh & McLennan Companies, Inc. and the New York Attorney General's Office and the New York Superintendent of Insurance. Marsh has agreed to create a restitution fund of $850 million for its domestic policyholder clients. The action implicates the following companies as primary conspirators: • Marsh & McLennan Companies, Inc. The 38-page complaint lays out an intricate conspiracy that allegedly allowed the defendants to make hundreds of millions of dollars in additional fees by subverting their clients’ best interests. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Insurance Cases of Interest The parties have reached a tentative multimillion dollar settlement in an action filed against United Parcel Service, Inc. on behalf persons who bought "excess value" package insurance from UPS going as far back as 1984. The action alleges that UPS overcharged for the insurance in violation of state and federal laws. Customers will be able to apply for UPS vouchers once the settlement is finalized. The parties have reached a proposed $7.87 million settlement of a class action against Republic Mortgage Insurance Company on behalf of mortgage borrowers whose mortgage was insured by Republic under a certificate that became effective between December 18, 1996, and March 31, 2003. The action claims that the insurance was provided on terms that were very favorable to the mortgage lenders. To recover under the settlement, class members must submit a claim form postmarked no later than September 8, 2003. Three class actions pending against Lawyers Title Insurance Corporation, American Pioneer Title Insurance Corporation (now known as Ticor Title Insurance Company of Florida) and Fidelity National Title Insurance Corporation have settled. These companies have joined Florida's largest title insurer, Attorneys & Title Insurance Fund, Inc., (known as "The Fund") in settling actions alleging that the insurers overcharged persons that pay the premiums for title insurance in Florida. The unfortunate practice of insurance credit scoring is legal under federal law, with some limitations. Four similar class actions have been filed against auto insurance provider Progressive Corporation and related companies on behalf of policyholders who allege that the insurers do not advise them that it uses their credit reports in deciding to force them to pay higher premiums than others, in violation of the federal Equal Credit Opportunity and Fair Credit Reporting acts.
Ten Illinois residents filed a class action lawsuit against Allstate Insurance Company alleging the insurance company charges different premiums to customers with the same risks. The plaintiffs allege Allstate violated the Illinois Consumer Fraud and Deceptive Business Practices Act and was unjustly enriched. According to the complaint filed May 25 in St. Clair County Circuit Court, Illinois law mandates that insurers treat like risks alike and different risks differently.
A class action lawsuit has been filed in the Northern District Court of Oklahoma against Epeo Link, Inc. for violations of the Employee Retirement Income Security Act (ERISA). ERISA is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. Class members seek a declaratory judgment that they are entitled to relief under ERISA, money damages, injunctive relief, punitive damages, attorney's fees and costs of the litigation. |
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