Ten state attorneys general have filed a motion in New Jersey federal court opposing the National Assn. of Professional Insurance Agents' stance concerning Zurich American Insurance Co.'s proposed class action settlement over its broker compensation practices.

In the PIA's amicus brief, filed Sept. 15 in U.S. District Court for the District of New Jersey in Newark, the association opposed Schaumburg, Ill.-based Zurich's proposed settlement, objecting to the selective ban on payment of contingent commissions and mandated use of what the PIA said was a "flawed" disclosure statement that creates legal conflicts.

In their Sept. 26 responding brief, state attorneys general from California, Florida, Hawaii, Maryland, Massachusetts, Oregon, Pennsylvania, Texas, Virginia and West Virginia contended that the PIA's concerns are limited and that they also are premature and should be reserved for the final fairness hearings on the Zurich settlement.

In their brief, the attorneys general said the PIA's concerns about the disclosure statement are not "warranted" and do not assist the court in determining the fairness of the settlement.

"There can be little doubt that the settlement as a whole is fair and adequate and easily satisfies the minimal standard for preliminary approval," they attorneys general said in their brief.

The state officials also said that, if approved, Zurich's settlement would provide at least $121.8 million to class members.

Meanwhile, prior to the attorneys general's motion, the Independent Insurance Agents & Brokers of America also filed an amicus brief requesting that the proposed settlement be changed.

In its brief, the Alexandria, Va.-based IIABA holds that Zurich--and not agents and brokers--should have the responsibility for providing policyholders with any disclosure form required by the proposed settlement about how it compensates producers.

In addition, the IIABA argues that the mandatory disclosure form called for in the proposed settlement would not promote transparency, and the group reiterates its opposition to a provision that would ban Zurich from paying producers incentive compensation in the future if 65% of the insurers in the marketplace do not pay such compensation for a particular insurance product or line of business.

A spokeswoman for the Texas attorney general's office, which is leading the effort for the 10 attorneys general, said the office is reviewing the IIABA filing.

Zurich reached two regulatory settlements in connection with the proposed class action lawsuit pending in the New Jersey court against several commercial insurers and brokerages alleged to have been involved in improper broker compensation and business practices.