Ace Ltd.

Philadelphia, PA: (May-14-07) The Pennsylvania attorney general's office and state Department of Insurance filed charges against Bermuda-based property and casualty insurance company Ace Ltd., accusing it of having deceptive trade practices. The suit alleged that Ace participated in a scheme with various insurance brokers to falsify quotes in order to easily steer business to preferred insurers, in exchange for the same thing in return. Attorney General Tom Corbett claimed that this was a shrewd business tactic that created a false appearance of market competition and cheated consumers out of millions of dollars. Ace was also accused of paying contingent commissions, which are payments to brokers and agents on top of their base commissions. In exchange, brokers agreed to steer excess casualty policies to Ace and increased premiums on existing policies. Pennsylvania, which regulates most of the company's U.S. operations, said the deceptive practices occurred between 2000 and early 2004. Ace Ltd. agreed to pay $9 million to settle the fraud allegations against it. [FORBES: ACE LTD. DECEPTIVE BUSINESS PRACTICES]

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Published on May-15-07