Life Insurance Quote Overview

The Hartford Financial Services Group, Inc. has agreed to pay $115 million to settle allegations by Connecticut, Illinois and New York that it faked bids and allowed illegal trading in some mutual funds.

The settlement brings to more than $600 million the amount that the states have recovered in restitution and penalties through a continuing investigation into bid rigging, concealed contingent commissions and other improper insurance broker and agent compensation practices.

Under the settlement, The Hartford will establish a $5 million fund for policyholders harmed by improper insurance practices, and pay a $26 million penalty to the three settling states -- $3 million each going to Connecticut and Illinois, and $20 million to New York. It will also establish an $84 million fund to compensate market timing investor victims.

"The Hartford failed to act swiftly and strongly to stop and disclose market timing - despite its duty to do so," said Connecticut Attorney General Richard Blumenthal. "It failed to do enough soon enough to prevent this pernicious practice. Blumenthal said The Hartford fully cooperated in the ongoing investigation.

Blumenthal said the investigation revealed that The Hartford provided false and fictitious insurance quotes to several offices of broker Marsh & McLennan and made hidden payments and steering for medium commercial property and casualty lines. Marsh, he said, recruited a group of insurance carriers willing to provide ready quotes. The Hartford also provided Marsh with intentionally high and non-competitive bids, knowing Marsh could deceptively create the mirage of a competitive market -- with the understanding that it could win other desirable future business from Marsh

A $5 million fund will be created by The Hartford to pay back those consumers damaged by these illegal quoting practices.

The settlement also establishes an $84 million fund to be paid to investors nationwide harmed by The Hartford allowing "market timing" trading in some of its mutual funds. Wall Street traders engage in market timing by taking advantage of the fact that mutual fund share prices are set at the close of the trading day. Market timers trade on news and market events happening throughout the day and around the world that effect a mutual funds' share price. By buying mutual fund shares after important events or market changes, but before the share price changes, some market timers make huge amounts of money.

Referred from: (http://www.consumeraffairs.com)