Posted on 01 Feb 2011
Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist, announced on Monday that it has come to an agreement with the Connecticut Attorney General to resolve litigation initiated in 2007 against Guy Carpenter and Excess Reinsurance Company, now Knightbrook
In addition, Guy Carpenter has issued the following statement regarding the settlement:
"The Attorney General had alleged that facilities offering reinsurance to more than 150 small- to midsized insurance companies over decades were anti-competitive and unfair. Guy Carpenter vigorously denied these claims as contrary to both the relevant facts and law. Guy Carpenter maintains that these facilities were actually pro-competitive, offering these clients the best available terms for reinsurance among the numerous options available to them. In turn, these broader and more competitive terms for reinsurance enhanced our clients’ ability to compete in the insurance marketplace.
"Given our firm belief that this was and is the case, our goal always has been to ensure that the facilities remained free to operate as they previously have, in order to bring the most competitive terms to our clients. We believe the terms of this settlement accomplish that goal. In exchange for the Attorney General’s dismissal of the litigation and promise not to sue the defendants and participating reinsurers regarding their past or future involvement in the facilities’ operations, Guy Carpenter and eleven participating reinsurers will collectively pay the State of Connecticut $4.25
"Furthermore, through 2015, Guy Carpenter agreed to make certain disclosures to clients, and conduct the negotiation and placement of reinsurance for facility participants, in the manner initiated before the Attorney General commenced the investigation that led to this litigation.
"In addition to the fact that the settlement requires no material change in the way the facilities operate, Guy Carpenter agreed to pay a portion of the $4.25 million payment because the amount was substantially less than the expected legal fees and related costs to defend this case. For all of
these reasons, Guy Carpenter concluded that the settlement is in its and its clients’ best interests."