CHICAGO—Aon Corp. has reached a $38 million tentative settlement to resolve a class action lawsuit alleging the Chicago-based brokerage breached its fiduciary duty by collecting contingent commissions from insurers without disclosing them to clients.
A Cook County Circuit Court judge on Wednesday gave preliminary approval to the settlement, an Aon spokesman confirmed. He declined to comment further.
The settlement comes on the heels of Aon's $190 million joint settlement to resolve charges by officials in Connecticut, Illinois and New York that it fraudulently steered clients to maximize its contingent commissions and linked insurance placements to reinsurance brokerage business (BI, March 7).
In announcing its joint settlement last week, Aon said it had established a $40 million reserve in connection with related litigation matters.
Cook County Circuit Court Judge Julia M. Nowicki ruled last July that the 1999 lawsuit over the controversial industry practice could proceed as a nationwide class action against Chicago-based Aon and its subsidiaries Aon Group Inc. and Aon Services Group Inc. (BI, Aug. 2, 2004).
The lawsuit alleged that Aon "devised, implemented, supervised and enforced" a scheme to conceal the commissions from its clients. The plaintiffs, led by two Aon clients, sought to collect any undisclosed commissions and profits Aon received from the arrangements.
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