A settlement has been reached in an investigation that Texas Attorney General Greg Abbott says uncovered collusion between a Bermuda-based commercial casualty insurer and various U.S. insurance companies. The settlement amount in the antitrust case is $2.1 million, the AG’s office reported.
Abbott says that between 2001 and 2004, Allied World Assurance Co. (AWAC) of Bermuda, and companies affiliated with American International Group (AIG) conspired to coordinate bidding opportunities and share client information.
“An open, competitive marketplace is critical to the success of our capitalist system,” Attorney General Abbott said. “Texans will not tolerate anticompetitive schemes that violate the law and drive up prices. We will continue cracking down on unlawful operations that hurt Texas policyholders.”
In a statement released by the company, AWAC denied any wrongdoing. “Allied World does not admit liability and denies the allegations made by the State of Texas,” the company’s release said. “Specifically, Allied World denies that any of its activities in the State of Texas violated antitrust laws, insurance laws or any other laws. Nevertheless, to avoid the uncertainty and expense of protracted litigation, Allied World agreed to enter into the Agreed Final Judgment and Stipulated Injunction and settle these matters with the Attorney General of Texas.”
According to the AG’s office, under the terms of the agreed final judgment, AWAC is prohibited from coordinating with its founding companies on the pricing, marketing, underwriting or quoting of its insurance policies. Those founding companies include AIG, Chubb and Goldman Sachs.
According to the judgment, AWAC must maintain an operational separation from its founding companies. AWAC is also prohibited from using policyholder databases maintained by the founding companies and may not allocate customers or submit bids in a manner that violates antitrust laws.
Source: Texas Attorney General’s Office, Allied World Assurance
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