HARTFORD, Conn. (Legal Newsline) - One of the nation's largest benefit consulting firms has agreed to pay nearly a half-million dollars to the State of Connecticut to resolve allegations that it received compensation from insurers for access to lucrative pension plan business.
USI Consulting Group will pay $470,000 as part of the settlement, announced Thursday by Connecticut Attorney General Richard Blumenthal. He alleged USICG received hidden payments from three insurance companies in exchange for competitive information and "last look" bidding opportunities.
"Hidden payments from insurers to brokers, disguised as 'expense reimbursements' and 'administrative costs,' were loaded into (Single Premium Group Annuity) premiums for private and public pension plans nationwide," Blumenthal said.
"These payments served only one purpose -- to skew the market in favor of select carriers who were willing to pay to play."
Blumenthal said USIGC cooperated with his investigation. The three insurance companies -- The Hartford Insurance Co., The Principal Financial Services Group and Mutual of Omaha Insurance Co. -- have also settled with him.
USICG also agreed to ban the acceptance of contingent compensation, something Blumenthal said "should serve as a model for other brokers in the industry."
"More than the money, this settlement provides business reforms that prevent artificially inflated pension plan costs for private and public companies, non-profits and others," Blumenthal said.
"Today's settlement stops secret payments to pension plan brokers, ensuring transparency and integrity for certain investments."
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.