New York attorney general Eliot Spitzer and state insurance superintendent Howard Mills have reached an agreement with Ace to resolve allegations of bid-rigging and improper "finite reinsurance" transactions.
The agreement will see Ace pay $80m in restitution and penalties and adopt a series of sweeping reforms of its business practices. In addition, Ace has issued an apology acknowledging its improper conduct.
Attorney General Spitzer, said: "We continue to clean up the insurance industry. Ace has acknowledged its problems and cooperated fully in our investigation. Ace is also adopting reforms designed to address the problems created by the use of contingent commissions and finite reinsurance."
In a statement, Ace apologised for its actions, saying: "As part of today's settlement with the attorneys general and the superintendent, Ace acknowledges that certain of its employees violated both acceptable business practices and Ace's own standards of conduct by engaging in behavior that included improper bidding practices and certain ‘finite reinsurance' transactions.
"Ace apologises for this conduct. It has reformed its business practices and is satisfied that this behaviour will not be repeated. In order to promote transparency and reduce the potential for conflicts of interest, Ace has supported legislation in the US to eliminate contingent compensation and through this agreement pledges to continue to do so."
