Judge Dubay did not determine any monetary damage, but ordered the broker to determine how much it made in non-disclosed Millennium Partnership Program commissions from purchases made by the state's residents in order to determine what the penalty should be.

In a 25 page decision, he wrote that "Acordia should not be allowed to claim that it is not liable for the unfair trade practices that it directed its subsidiaries to put in motion. To accept Acordia's position is to accept that revenue flows up but fiduciary obligations do not."

Attorney General Blumenthal declared the decision a "first-in-the-nation court victory" because the broker "broke the law when it failed to tell consumers about the arrangement."

"This case is a significant victory for insurance consumers--and honest, competitive businesses that were illegally shut out of the market by Wells Fargo's exclusive pay-to-play club," said Mr. Blumenthal in a statement.

"This victory is the first of its kind in the country--a resounding message to insurance brokers about their legal duty to be open and honest with clients," Mr. Blumenthal added.

Kathryn Ellis, a spokeswoman for San Francisco-based bank Wells Fargo, which owns the former Acordia, said the company plans to challenge the verdict, contending that the court misinterpreted the law and adding that the attorney general mischaracterized the court's decision in his statement.

"We plan to appeal and are confident it will be reversed," she said, adding that "no customer was hurt or suffered monetary loss."

In 1999, Acordia set-up the Millennium Partnership Program to pay for its investment in a new agency management system, AMS Segitta. Under the program, participating insurers would pay an additional 1 percent of the total value of the premiums in the form of contingent commissions in return for preferential treatment over a three year period.

Five insurers ultimately joined the program, Travelers, The Hartford, Chubb, Atlantic Mutual and Sun Alliance.

According to the judge's ruling, an Acordia memo showed the program would be a bonus for the broker and would pay "over and above, and incentive or profit sharing we receive on a local or regional level." Acordia's offices were instructed to give preferential treatment on new and renewal business to the five insurers.

During the trial, client testimony showed that individual brokers working for Acordia acted in the best interests of their clients, in one case placing business for a client with a carrier outside of the MPP that would cost Acordia $500,000.

The individual brokers did not know of the MPP or knew so little that it had no bearing on their business, the court said. The court also found that clients paid no more for insurance than they would have if the MPP was not in effect.

However, the judge said Acordia did have a fiduciary obligation to inform clients of the MPP because it "constituted a conflict of interest between Acordia and its clients."

"Acordia cannot hide behind its corporate form when it directs its wholly owned subsidiaries as its agents to carry out its unfair and deceptive business practices," the judge said, adding that under the Connecticut Unfair Trade Practices Act, the firm's actions were "'deceptive or misleading' as those terms are used."

Ms. Ellis noted that Wells Fargo Insurance voluntarily discloses all its commissions to clients. She said two cases brought in New York and Illinois stemming from the MPP are still pending.

She said in an e-mail that the Illinois case has not moved forward in some time and that Wells Fargo won the case in New York and the attorney general is appealing it to the New York Court of Appeal, the state's highest tribunal.