Shaun Zinck Apr. 20, 2015, 6:46pm

A Massachusetts insurance company and a former agent were ordered to pay more than $3.5 million for allegedly overcharging clients including small business owners and for “padding” premiums with hidden fees, Massachusetts Attorney General Maura Healey announced last week.

Suffolk Superior Court Judge Carol Ball issued the ruling against Kilgor Insurance Agency, former agent Andrew Crowther Jr., and owners Cyrus and Jeffrey Kilgore. 

“These defendants purposely and secretly increased the cost of their clients’ insurance by tacking on undisclosed and excessive agency fees,” Healey said. “This should serve as notice that we will guard against any company taking advantage of customers by using deceptive tactics, particularly where the price of a product is difficult to fully understand.”

Ball's ruling comes after a trial that took 22 days in 2012 and 2013.

A standard agent compensation fee is about 10 percent of the insurance policy premium; however, the court ruled Kilgore charged an average of 47 percent of the insurance policy premium in hidden fees.

The settlement includes $2.2 million in restitution to approximately 100 clients of Kilgore and $1.3 million in statutory pre-judgment interest of 12 percent per year, dating back to December 2009 when Healey's office filed its suit. 

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