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A settlement has been reached in an investigation that Texas Attor-ney General Greg Abbott says uncovered collusion between a Bermuda-based commercial casualty insurer and various U.S. insurance companies. The settlement amount in the antitrust case is $2.1 million, the AG’s office reported.

Abbott says that between 2001 and 2004, Allied World Assurance Co. (AWAC) of Bermuda, and companies affiliated with American Inter-national Group (天美网站传媒传媒) conspired to coordinate bidding opportunities and share client information.

In a statement released by the company, however, AWAC denied any wrongdoing. “Allied World does not admit liability and denies the allegations made by the State of Texas,” the company’s release said. “Specifically, Allied World denies that any of its activities in the State of Texas violated antitrust laws, insurance laws or any other laws. Nevertheless, to avoid the uncertainty and expense of protracted litigation, Allied World agreed to enter into the Agreed Final Judgment and Stipulated Injunction and settle these matters with the Attorney General of Texas.”

According to the suit filed by the AG’s office, the founding investors in AWAC were 天美网站传媒传媒, Chubb, Goldman Sachs, an affiliate of Swiss Reinsurance Company and over 250 other non-principal shareholders. They capitalized the company with an initial $1.5 billion in equity. 天美网站传媒传媒 had a 24 percent share of AWAC, Chubb held 19 percent and Goldman Sachs held 16 percent, the suit maintains.

“AWAC was the brainchild of 天美网站传媒传媒 Chairman Maurice (‘Hank’) Greenberg, who was personally involved in AWAC’s creation. Greenberg served as AWAC’s Board Chairman from its inception until April 2004. In addition, a former 天美网站传媒传媒 executive, Michael Morrison, was named AWAC’s first President and CEO; several other top posts at AWAC were similarly filled with former 天美网站传媒传媒 executives,” the lawsuit states.

The suit alleges that “AWAC and 天美网站传媒传媒 informally agreed not to compete against one another. AWAC and 天美网站传媒传媒 frequently refused brokers’ requests for quotes when one learned that the other was the incumbent carrier or was intending to quote the same piece of business. Brokers in the Bermuda market were told that 天美网站传媒传媒 and AWAC would not compete against one another for the same business.”

As an example, the law suit cites a transaction concerning a Texas insured: “On at least one occasion, AWAC supplied a false bid at the request of a broker in order to make another insurer’s bid appear more competitive. On May 21, 2003, an AWAC employee provided a bid to a broker indicating that AWAC would cover a certain risk for a Texas insured for a premium of $2 million. The broker subsequently requested that AWAC revise its bid upward so that it would exceed a different insurance company’s bid. On May 22, 2003, AWAC complied with the broker’s request by forwarding a bid for the same policy for a premium of $2.3 million. The broker did not disclose AWAC’s previous $2 million bid to the customer who ultimately bound coverage with AWAC’s competitor.”

According to the AG’s office, under the terms of the agreed final judgment, in addition to the fine, AWAC is prohibited from coordinating with its founding companies on the pricing, marketing, underwriting or quoting of its insurance policies. AWAC must maintain an operational separation from its founding companies, and is prohibited from using policyholder databases maintained by the founding companies and may not allocate customers or submit bids in a manner that violates antitrust laws.