Posted on 03 Jan 2011
On Friday, New York Attorney General and now Governor Andrew Cuomo announced that four insurers — ACE, Zurich, Pennsylvania Manufacturers and CNA — have agreed to pay $120 million to settle claims that the firms overcharged policyholders.
These insurance companies collected excessive surcharges from the policyholders of workers’ compensation insurance, according to a statement from Mr. Cuomo’s office. The Worker’s Compensation Board — which collects annual fees from insurers who then pass the costs on to policyholders in the form of surcharges — changed the way it calculated these surcharges in 2000. The shift, Cuomo’s statement state, led some insurers to overcharge.
ACE has agreed to pay $70 million; Zurich, $37.5 million; Pennsylvania Manufacturer, $5.9 million; and CNA, $5.75 million.
“These four groups of insurance companies have done the responsible thing by agreeing to resolve their disputes with the state,” Mr. Cuomo said in a statement.
He also called on others to come clean.
“Insurers who still retain excess funds should follow their lead or they will be brought to justice,” Mr. Cuomo said.
The agreement is further proof that Mr. Cuomo, whose term as attorney general ended at midnight on Friday, December 31, is eager to leave his house in order. Over the past month, Mr. Cuomo has announced several settlements with investment firms related to his public pension fund investigations. On Thursday, he agreed to accept a $10 million settlement from Steven L. Rattner, the founder of the private equity firm Quadrangle, who was accused of improper dealings with the state’s pension fund.