AON Faces Fraud, Anti-Competitive Allegations
Long-time Aon Corp client, Illinois-based Caterpillar Inc. is charging Chicago-based Aon Corp. is with fraud and anticompetitive allegations.
Similar to allegations made in 2005 by attorneys general in Connecticut, Illinois and New York, Caterpillar charges that Aon steered business to favored insurers, tied the placement of retail insurance business to the purchase of reinsurance brokerage services and manipulated pricing on client placements.
Unlike the 2005 suit that charged Aon with fraud and unjust enrichment, and the simultaneous settlement, Caterpillar accuses Aon and units Aon Risk Services of Illinois Inc. and Aon Re Global of five counts of violating federal and state antitrust laws in addition to various other fraud and unjust enrichment allegations.
The suit, filed in U.S. District Court in Peoria, Ill., seeks damages, attorneys fees, restitution and disgorgement.
In March 2005, Aon agreed to pay $190 million in client restitution and to change various business practices in its settlement with the three state attorneys general.
According to Caterpillar’s complaint, before and after the 2005 settlement, asked Aon to review documents and information relating to its policies in an attempt to determine whether the alleged business practices affected Caterpillar and, if so, to what extent. Aon, however, failed to respond with adequate information, the suit charges.
Because Aon remains Caterpillar’s insurance broker, Caterpillar faces continued injury from the alleged improper business practices, the suit alleges. Caterpillar has been an Aon client since 1981, the suit notes.
An Aon spokesman said the lawsuit is "utterly meritless" and that it intends to defend itself "vigorously."
Published on October 18, 2007
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