In a statement posted to his Web site, Attorney General Eliot Spitzer and Insurance Superintendent Howard Mills said the San Diego-based Universal will set up a $2 million restitution fund to reimburse clients and will adopt business practices preventing future acts of fraud and “anti-competitive practices.”
In addition, Universal agreed in the settlement to limit its insurance brokerage compensation to a single fee or commission, to impose a ban on contingent commissions and communication fees, and a requirement that all forms of compensation be disclosed to and approved by clients before buying insurance.
Universal has also agreed to a monitor of its insurance related business practices for a period of five years, Spitzer and Mills said.
The agreement resolves a complaint filed by the Attorney General’s Office and a citation filed by the state Department of Insurance in November 2004 alleging that Universal received undisclosed payments from some of the country’s largest life insurance companies, including MetLife, Prudential and Unum Provident, in return for steering to them the insurance business of Universal’s clients (See Spitzer Expands Focus in Insurance Probe ).
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