UNDISCLOSED CONTINGENT COMMISSION PROGRAM VIOLATES CONNECTICUT UNFAIR TRADE PRACTICES ACT
The State of Connecticut brought an action pursuant to Connecticut’s Unfair Trade Practices Act against Acordia, Inc. alleging unfair trade practices that harmed a class of insurance companies. Acordia is an independent insurance agent and broker working through a contingent commission program called the Millennium Partnership Program, in which which five insurers (Travelers, The Hartford, Chubb, Atlantic Mutual and Sun Alliance) agreed to participate. The Connecticut Superior Court found that Acordia’s non-disclosure of the MPP to its clients constituted a conflict of interest in violation of its fiduciary obligations which in turn violated Connecticut’s Unfair Trade Practices Act. However, because the violation was predicated on 1999-2002 common law (and does not constitute a violation of public policy in 2010) the Court declined to issue an injunction. Acordia was, however, order to account for non-disclosed MPP based commissions for products purchased by consumers in the State of Connecticut. State of Connecticut v. Acordia, Inc., Case No. 074020455S (Conn. Super. Ct. Apr. 10, 2010).
This post written by John Black.
