NU Online News Service, 2:35 p.m. EDT--West Virginia's Attorney General Darrell McGraw has sued insurance broker Acordia claiming the broker received millions of dollars in "hidden" contingent commissions in return for steering business to certain carriers.
The suit against Chicago-based Acordia, and Acordia of West Virginia Inc., claims that the payments "were unfair and deceptive and resulted in less competition for insurance," the attorney general's office said in a statement.
"Secret contingent commissions skew the marketplace and may cause us to pay more for our insurance premiums," said Mr. McGraw. "The world's largest insurance brokers already have sworn off secret payments. I expect Acordia to be next."
Acordia is a subsidiary of San Francisco-based financial services company Wells Fargo & Company.
On its Web site, Acordia has posted a list of core values and terms of disclosure. The broker said it is committed to full disclosure of all fees and commissions and will calculate for its customer what, if any, contingent commissions it expects to receive on a placement.
A spokeswoman for Acordia said the firm's policy is not to comment on ongoing litigation. She added that the firm does not condone any unethical behavior in any of its business dealings.
A call to Wells Fargo for comment was not returned.
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