Zurich Financial reaches a new settlement in US

The bill for Zurich is so far $325 million Keystone Archive

Zurich Financial Services agreed on Monday to pay $153 million (SFr200.2 million) to settle bid-rigging and accounting investigations in the United States.

This content was published on March 28, 2006 - 04:01

Switzerland's biggest insurance company had only announced a week ago that it was paying nearly $172 million following an industry-wide probe into insurance dealings.

In a statement, Zurich said a total of $325 million would be booked in the first quarter, plus lawyers' fees and payments in connection with class-action suits.

The latest settlement known as the "Three-State Agreement" is with the attorneys general of New York, Illinois and Connecticut.

Zurich is to pay $88 million in restitution to policyholders and $65 million in fines - $39 million to New York and $13 million each to Connecticut and Illinois.

New York Attorney General Eliot Spitzer said that Zurich had also agreed to "sweeping reforms" and had made an apology acknowledging its improper conduct.

"Zurich's willingness to acknowledge problems, adopt reforms and provide appropriate compensation to customers will help the company move forward and will help promote full and fair competition in the insurance industry,'' Spitzer said in a statement.

No violations

None of Zurich's businesses admits to any violation of US federal or state laws as part of the settlement.

Last week, Zurich announced an agreement relating to broker compensation and insurance placement practices with ten attorneys general and three departments of insurance, which other authorities may join.

Zurich's CEO James Schiro said the accords reached in the past two weeks represented "significant progress" in the company's efforts to resolve the uncertainty associated with certain industry-wide practices.

"This industry, like others before it, is undergoing a transformation, and these agreements will bring greater clarity to how Zurich will move forward to serve producers and customers in this new era of transparency."

"With our significantly enhanced compliance structure and our company-wide commitment to ethical behaviour and outstanding service, we have in place standards that promote the best interests of customers, agents, brokers and Zurich," he commented.

swissinfo with agencies

In brief

Zurich Financial Services has offices in North America and Europe as well as in Asia Pacific, Latin America and other markets.

It was founded in 1872 and has its headquarters in Zurich, Switzerland. It employs approximately 55,000 people and has customers in more than 120 countries.

In February the company said net profit had risen by 30 per cent in 2005 to a record $3.2 billion (SFr4.2 billion) despite record hurricane claims.

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