Connecticut Attorney General Richard Blumenthal reached a $1.3 million settlement with The Hartford Financial Services Group Inc., resolving claims that its now defunct subdivision, Hart Re Co., participated in several anticompetitive schemes that illegally inflated insurance and reinsurance costs nationwide.
The Hartford settlement stems from Blumenthal's ongoing litigation against Guy Carpenter & Co. LLC. In 2007, Blumenthal sued Guy Carpenter for orchestrating a series of alleged conspiracies with dozens of reinsurers that illegally inflated costs for insurance companies and consumers nationwide. In some cases, according to Blumenthal, prices rose by 10% to 40% over the course of several decades. The Hartford participated, as a reinsurer, through its subdivision, Hart Re Co., in several of the conspiracies beginning in 1986 until 2001.
The Hartford, which is no longer involved in the reinsurance market, cooperated with Blumenthal's investigation and, as part of the settlement, provided critical information that has supported the action against Guy Carpenter. The information, including evidence, has allowed Blumenthal's office to expand the allegations against Guy Carpenter in an amended complaint filed this week.
David Snowden, a spokesman for Hartford, confirmed the settlement with the Wall Street Journal on Thursday. "We are pleased to have come to an agreement with the attorney general's office," Snowden said. "The Hartford has been out of the property/casualty reinsurance business since 2003, and we agreed to the settlement to avoid ongoing expenses related to the case. We believe that our participation in the reinsurance facilities was lawful and we settled to avoid litigating with the attorney general over a business that the Hartford exited years ago."
With The Hartford’s cooperation, Blumenthal’s office will continue its pursuit of Guy Carpenter in court. "The Hartford has cooperated with my industry-wide reinsurance investigation, particularly involving Guy Carpenter, one of the world's largest reinsurance brokers and the ringleader of pervasive price-fixing schemes for approximately 50 years,” Blumenthal said. "Guy Carpenter enlisted The Hartford and countless other coconspirators to participate in pay-to-play schemes in which Guy Carpenter allegedly funneled lucrative business to select inner circles of reinsurers in exchange for excessive fees and other benefits from these reinsurers."
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