St. Paul settles broker commission issues
The St. Paul Travelers Companies Inc. has entered into a $77 million settlement with the attorneys general of New York, Connecticut and Illinois, as well as with the New York State Department of Insurance, resolving issues relating to those states' industry-wide investigations into producer compensation, bid rigging, reinsurance tying and finite reinsurance.
While not admitting any wrongdoing, the companies agreed to:
— pay $37 million into a fund for certain excess casualty policyholders and pay $40 million in fines;
— enhance the company's disclosures regarding its producer compensation practices;
— strengthen its ongoing training and education of employees;
— discontinue paying contingent commissions on excess casualty coverage in the United States through 2008; and
— discontinue paying contingent commissions on any line of business if 65 percent of the United States market for that line does not pay such commissions or has signed similar settlement agreements.
