Under the terms of the agreement, the company does not admit wrongdoing, but will pay the state $100,000 in civil penalties and forfeit $1.6 million to be deposited in the state's general fund.

In 2007 WGA reached a settlement of close to $4 million with Massachusetts officials over similar allegations involving 700 customers.

Connecticut officials note that the 2007 agreement provided restitution to WGA clients including Milford Power.

"Deceptive business practices will not be tolerated in Connecticut. Clients deserve honest answers and good faith dealings when they trust others with their money," Leonardi says in a statement. "Any company or individual who violates that trust will be held accountable."

Jepsen adds, "The conduct in this case was particularly egregious, warranting a separate prosecution and settlement in Connecticut. The company knew that it was violating Connecticut law while engaging in this conduct and took steps not only to hide it from its clients, but also from the state. Under this agreement, WGA will forfeit nearly all of the unlawfully obtained overcharges not already returned."

Conn. official say WGA concealed certain fees and commissions, issued dummy invoices, altered original policies and kept two sets of books to conceal the practice. They say the questionable bookkeeping and billing practices dated back to 2002, resulting in Milford Power allegedly being overcharged more than $2 million.

Officials allege that when the insurance department asked the company in 2004 about WGA's alleged actions, the firm "did not respond completely and accurately" to the department's inquiry.

A representative with WGA declined to comment.

However, in the 2007 settlement, WGA issued a statement saying that it would apologize for its actions and knowledge of practice about from its own internal investigation. It adds that the three employees involved in the practice left the company in 2005.