NEWARK, N.J. — Marsh & McLennan Cos. Inc. has filed a proposed $69 million settlement in the multidistrict litigation lawsuits alleging that it and others participated in broker-centered and global conspiracies involving undisclosed contingent commission agreements and bid rigging (In Re Insurance Brokerage Antitrust Litigation, No. 04-5184; In Re Employee-Benefit Insurance Brokerage Antitrust Litigation, No. 05-1079, D. N.J.).
In the proposed settlement filed July 3, the Marsh defendants also agree to allow the class plaintiffs to pursue $14.5 million in attorney fees for class counsel and $4.5 million for state court class counsel.
Related Resource
Mealey's Litigation Report: Insurance Broker Liability
Mealey’s Litigation Report: Insurance Broker Liability covers litigation related to broker-insurer practices, including sales commissions, contingent commissions, rigged bids, class action complaints and related securities or ERISA violations. The report also follows the news pertaining to investigations by state insurance departments and/or attorneys general into alleged illegal or unethical behavior. Published monthly.
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Six months ago, Chief U.S. Judge Garrett E. Brown Jr. of the District of New Jersey dismissed the Employee Retirement Income Security Act (ERISA) claims filed against the insurance brokers and insurers, determining that they were not ERISA fiduciaries with regard to allegations of bid rigging and contingent commissions.
The judge had previously dismissed the remaining racketeering claims a month after having dismissed the antitrust claims in the two consolidated class actions: one filed by property and casualty policyholders, the other by employee benefit policyholders. These rulings had resolved the major claims in the commercial track of the MDL.
On June 30, the Third Circuit U.S. Court of Appeals granted the joint dismissal of the Marsh defendants’ appeal.
Of the $69 million settlement fund, $7 million will be used to settle with individual policyholders who opt out of the class and $5 million will go to state regulators. According to the agreement, Marsh denies all claims of misconduct but agrees in the future to adhere to all laws and regulations and to accept industry standards of conduct.
The proposed settlement amount will be funded with the remainder of the $850 million fund created in connection with the New York attorney general settlement agreement reached in 2005 to settle a bid-rigging lawsuit.
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