The Connecticut Supreme Court has ruled that Attorney General Richard Blumenthal can attempt to recover damages from Marsh & McLennan, Inc. for harming the economy of the entire state. The Attorney General filed suit in 2005 on behalf of the state against Marsh, alleging the mega-brokerage firm rigged bids and colluded with insurers in a “pay to play” scheme in which it set prices for commercial insurance in the state.
Connecticut is one of only a few states that allow regulators to seek damages for anti-competitive business practices that harm the general economy of the state. The Attorney General contends Marsh’s unfair business practices raised the prices of insurance for all consumers and harmed both policyholders and non-policyholders. Major corporations in Connecticut, which were or remain policyholders with Marsh, include Kaman Corp., Bic Corp., United Technologies Corp., Xerox Corp. and General Electric Co.
The Supreme Court ruling overturns part of a ruling by a lower trial court, which kept the Attorney General from recovering damages to the general economy. Lawyers for the state contended “Connecticut is the home of many insurance companies as well as other large private employers” which have ”a substantial impact on the general economy of Connecticut.” The insurance industry plays a considerable role in Connecticut’s economy, employing approximately 70,000 persons and representing 7% of the state’s gross product. New York auditors have reported that Marsh has paid $850 million to policyholders as part of a massive regulatory settlement arising out of the allegations.
Source: Insurance Journal
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