In a press release dated January 4, 2008, Massachusetts Attorney General Martha Coakley’s Office reported that it filed a complaint in Suffolk Superior Court against Ohio-based insurer Great American Insurance Group (“Great American”). The complaint alleges, in part, that Great American submitted a false insurance premium quote to Norwood, Massachusetts based semi-conductor manufacturer Analog Devices. The complaint seeks relief in the form of restitution, attorneys’ fees, civil penalties, and a court order prohibiting Great American from further engaging in “unfair and deceptive business practices.” A copy of the Massachusetts Attorney General Office’s press release can be found here.
The complaint alleges that in 2004, at the request of insurance broker Marsh & McLennan, Great American submitted an “intentionally uncompetitive quote” to Analog Devices. Great American allegedly submitted this bid to make another insurance company’s bid look competitive. The complaint further alleges that in return for this favor, Marsh & McLennan steered another one of Analog Devices’ insurance policies to Great American at a pre-determined price. The press release claims that “[i]nsurers such as Great American paid Marsh & McLennan lucrative contingent commissions based on the volume of business Marsh & McLennan placed with them.”
In a press release issued that same day, Great American denied the allegations and said “Great American denies wrongdoing and denies the allegations of the Attorney General’s suit. Great American’s conduct in issuing that quote was lawful.” Great American also said that “the company intends to vigorously defend itself against the Attorney General’s allegations.”