The week before, the company settled with California, Florida, Hawaii, Maryland, Massachusetts, Oregon, Pennsylvania, Texas and West Virginia for a total of $171.7 million, including fines and restitution. Last week's settlement with three additional states brings the total financial commitment from Zurich to just under $325 million.

New York Attorney General Eliot Spitzer, who began investigating such activity in 2004, said Zurich's willingness to adopt reforms and provide restitution will go a long way toward promoting fair competition in the insurance industry.

Zurich Chief Executive Officer James Schiro said the company's “significantly enhanced compliance structure” will provide safeguards against any recurrences.

Zurich joins American International Group in having settled with state officials over allegations of wrongdoing regarding broker compensation. In addition, the country's three major brokerages–Marsh, Aon and Willis–have also reached agreements with states for restitution and to stop the practices in question.

Meanwhile, Zurich American has begun assessing which excess casualty insurance customers are due restitution under its settlement with New York, Connecticut and Illinois, which requires complete calculations by July 10 on how the $88 million due to policyholders will be distributed, a company representative said.

While the tri-state agreement calls for customers in those states to be paid by Feb. 7, 2007, the Zurich representative, Steven McKay, said the restitution timetable for $151 million in refunds under the earlier, separate agreement with nine other states is up in the air.

He noted the company's previous statement that until Zurich negotiates a final settlement for a class-action suit, and until “the attorneys general review the plan for allocating the settlement and the class-action settlement is approved by the court, we will not know who will be eligible to receive restitution, or the timing or mechanics for the distribution of the restitution funds.”

Mr. McKay said various units of the insurer are already at work making calculations as to how much individual policyholders may be owed.

The tri-state agreement calls for a report to be made to the New York, Illinois and Connecticut attorneys general on July 20 listing policyholders by name and address and how much they are eligible for under a pro rata share of the settlement fund.

The share would be calculated by multiplying the $88 million by the ratio of the policyholder's premium divided by gross written premium for all eligible policies.

Policies included are for the period from Jan. 1, 2000 through Sept. 30, 2004. Policyholders are supposed to get a statement of what they are due on July 24, including a notice that the amount might increase if there is less than full participation by eligible policyholders.

Policyholders who elect not to participate will have their share used by Zurich to settle other claims “asserted by policyholders relating to the excess casualty bid-rigging or excess casualty steering allegations,” according to the agreement.

Meanwhile, for customers covered in the nine-state agreement, there are no dates yet for restitution as the group is still working out a plan of distribution, according to a source with one of the attorneys general involved. The one firm date in that agreement is for Zurich to pay the nine states $20 million in investigative costs by the second week in May.