Attorney General Richard Blumenthal has reached a $1.3 million settlement with The Hartford Financial Services Group, resolving claims that the insurer participated in several anticompetitive schemes that illegally inflated insurance and reinsurance costs nationwide.
The settlement stems from Blumenthal’s ongoing litigation against Guy Carpenter & Company, LLC, one of the world’s largest reinsurance brokers. The litigation and investigation concerns unlawful practices like pay-to-play and price collusion in the reinsurance industry — which insures or indemnifies insurance companies for extraordinary losses.
Blumenthal said The Hartford is cooperating to pursue money back from conspirators who raised premiums by up to 40 percent for thousands of consumers in Connecticut and nationwide.
“The Hartford is making history by this first-in-the-nation settlement — and drawing back the cloak of secrecy on a series of illegal price-fixing conspiracies that inflated insurance costs by hundreds of millions of dollars nationwide at the expense of 170 insurance companies and their customers,” Blumenthal said.
“The Hartford’s settlement advances our action against the ringleader, Guy Carpenter, that masterminded and orchestrated a shifty coterie of more than 20 coconspirator companies in illegal price fixing,” he added.
Tom Hambrick, a spokesman for The Hartford said the “company is pleased to come to an agreement with the attorney general’s office. We believe our participation in the reinsurance facilities was lawful. We settled to avoid the costs of litigating with the attorney general over a business that The Hartford exited years ago.”
In 2007, Blumenthal sued Guy Carpenter for orchestrating a series of alleged conspiracies with dozens of reinsurers that illegally inflated costs for insurance companies and consumers nationwide, in some cases by 10 to 40 percent, over the course of several decades.
The Hartford participated, as a reinsurer, through its subdivision, Hart Re Company, in several of the conspiracies beginning in 1986 until 2001. It ceased offering reinsurance in 2003, Blumenthal said.
The Hartford, which is no longer involved in the reinsurance market, cooperated with Blumenthal’s investigation from the beginning and, as part of the settlement, provided critical information that has supported the action against Guy Carpenter, including evidence that has allowed Blumenthal’s office to expand the allegations against Guy Carpenter in an amended complaint filed this week.
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