CONNECTICUT AG SETTLES ANTITRUST CASE AGAINST GUY CARPENTER & EXCESS RE
Connecticut Attorney General George Jepsen announced an antitrust settlement with Guy Carpenter & Co and Excess Re on January 31, 2011, concluding litigation pending for over three years. The settlement, amounting to $4.25 million, resolved allegations that the reinsurers were engaged in a series of antitrust conspiracies to fix prices, create closed reinsurance markets, and allocate reinsurance markets. The litigation against Guy Carpenter and Excess Re was the first such suit brought by a state or federal antitrust enforcement agency. The Hartford Financial Services Group settled similar claims with the Connecticut AG for $1.3 million in 2009.
This settlement is notable because, in addition the significant monetary payment, Guy Carpenter agreed as part of the settlement to reform a number of its nationwide business practices. The reforms, designed to prevent any suspicion of future antitrust violations, include disclosure of ownership interest in reinsurance companies, compensation arrangements, descriptions of facilities, disclosure of factors leading to its brokers making placement recommendations, implementation of minimum competitive bid requirements and a nationwide sampling program. State of Connecticut v. Guy Carpenter & Company and Excess Reinsurance Company, Case No. 07-4033778 (Conn. Super. Ct. Jan. 31, 2011).
This post written by John Black.
