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Member, Beacon International Group, Ltd.
ALEXANDRIA, Va.The National Assn. of Professional Insurance Agents has asked a federal judge to delay preliminary approval of a settlement with Zurich American Insurance Co. until what it considers to be a "flawed" disclosure statement is fixed.
The PIA brief came in response to motion by 10 state attorneys general that argued that PIA's earlier objections to the proposed settlement were limited, premature and should be reserved for the final fairness hearing on the Zurich settlement (BI, Oct. 2). Alexandria, Va.-based PIA has objected to the proposed settlement's selective ban on the payment of contingent commissions and its requirement that agents use a mandatory disclosure statementa disclosure statement that PIA argues would mislead class members about the relationships between agents and insurers.
Schaumburg, Ill.-based Zurich reached two regulatory settlements in connection with the proposed class action lawsuit pending in the U.S. District Court for New Jersey against several insurers and brokerages allegedly involved in improper broker compensation and insurance placement practices. In March, the insurer agreed to pay $171.7 million and to change certain business practices to resolve charges of price fixing and bid rigging by nine attorneys general. Shortly thereafter, it agreed to pay an additional $153 million to resolve similar allegations brought by three other states.
"It would appear that the settling AGs exceeded the considered judgment of most state regulators," said PIA's Oct. 6 reply to the brief on behalf of the state attorneys general. The PIA brief noted that attorneys general are not the primary insurance regulators in their states "the insurance commissioners and supervisors areand the vast majority of insurance commissioners have refused to join the multistate agreement."