People's Bank in Bridgeport, Conn., announced Friday that its insurance subsidiary had settled a dispute with the state over contingency commission payments with a $754,804 payment.
The state Attorney General's office had alleged abuse of the public trust by R.C. Knox & Co., the state's "agent of record" to place insurance for the Insurance and Risk Management Board and for its Development Authority. Connecticut is retaining Knox in that role, however.
Attorney General Richard Blumenthal said in a statement Thursday that Knox had settled allegations that it accepted improper concealed commissions on policies it placed for state agencies. Knox accepted $415,058 in commissions from property/casualty insurers on the state's account from 1997 through 2004, the state said. This amount was returned to the state in the settlement, plus $339,746, or 10% compounded interest.
A spokesman for Knox said it did nothing improper or illegal in accepting commissions from St. Paul Travelers Cos. and Hartford Financial Services Group Inc. but agreed to the payment "to avoid the uncertainty and expense of contesting claims the attorney general may make in connection with this issue." No lawsuit was filed.
As part of the settlement, Knox agreed not to accept any more contingent commissions on insurance placed for the state and agreed to cooperate with an investigation of the two insurers.
