Insurance Broker to Reimburse $2.6 Million
CONTACT: Tara Klimek or Nina Banister
Agreement also requires national broker to disclose commissions
TALLAHASSEE–Florida Chief Financial Officer Alex Sink, Attorney General Bill McCollum, and Insurance Commissioner Kevin McCarty today announced that multiple Florida cities and counties will receive approximately $2.6 million in reimbursements from Willis Group Holdings Ltd., a national insurance broker. Under the settlement, the broker denied wrongdoing but agreed to reimburse its clients without any formal action taken by the state agencies.
A joint investigation by the Attorney General's Antitrust Division and the Department of Financial Services (DFS) led to allegations that Willis improperly collected undisclosed fees or commissions when it placed various coverages with insurance companies. Willis brokered multiple insurance contracts in Florida from 1999 through 2004, and clients included more than a dozen public entities in the State of Florida, including economic development councils, city and county governments and school boards.
“Florida’s taxpayers deserve complete disclosure when local governments are conducting financial transactions with insurance brokers,” said CFO Sink, who oversees the DFS. “I commend everyone who assisted in the investigation and in getting this money rightfully returned to the citizens of Florida.”
“Honesty and accountability are of paramount importance in the insurance industry and the Attorney General’s Office will continue working to ensure such characteristics are in place,” said Attorney General McCollum. “I am pleased the agencies involved in today’s settlement were able to achieve this success for the Florida entities due the reimbursements.”
Insurance brokers represent their clients by advising them on their insurance needs and options. The brokers also represent the clients when negotiating the price and terms of insurance coverage offered by insurance companies. Under today’s agreement, Willis also agreed to make full written disclosure of all such commissions in the future and to pay the costs of the investigation. The recovery of $2.6 million in restitution funds is the result of an industry-wide investigation into insurance broker activities.
“This settlement is another step toward ensuring that Florida consumers are fully informed in their insurance transactions,” said Commissioner McCarty. “The expansion of transparency in the insurance marketplace serves to protect the interests of Florida consumers and continues to be a regulatory priority of the Office of Insurance Regulation.”
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.