Insurance broker Aon(AOC) agreed to pay $190 million to settle allegations it received kickbacks from insurance underwriters to push their policies.
The company, in settling charges championed by New York Attorney General Eliot Spitzer, agreed to pay the restitution to policyholders over 30 months. The company will also enact new transparency standards and issued a public apology. The settlement also covers allegations brought in Connecticut and Illinois. The charges mirror those made against the country's biggest insurance broker, Marsh & McLennan(MMC), which agreed to an $850 million settlement. Aon has previously said it would stop taking the kickbacks, which are known in the insurance industry as contingent commissions. Its fourth-quarter earnings fell due to their absence; in the first nine months of 2004 the company booked about $117 million in revenue from the payments. The payments "were characterized as compensation for 'services to underwriters' but were, in fact, rewards for the business that Aon steered and allocated to the insurance companies," according to the release detailing the settlement.>To order reprints of this article, click here: ReprintsTheStreet Premium Services For Personal Service: 877-471-2967
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