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Travelers Settles Class Action Lawsuit And State Investigations Concerning Contingent Commission Payments To Brokers

The Wall Street Journal reports today that Travelers Cos. Has reached a tentative class action settlement of a shareholder class action, and that the company has separately agreed to “pay $6 million to settle several state investigations over how it paid brokers.” The amount to be paid to settle the class action has not yet been disclosed. The settlement follows a failed attempt by defense attorneys to obtain dismissal of the class action complaint. According to The Wall Street Journal, the lawsuit and state investigations arose out of allegations “that Travelers conspired with brokers to submit fake bids [for insurance policies] even though the brokers had already determined which insurer would get business from a policyholder.” Travelers allegedly paid “contingent commissions” to the brokers that were not disclosed to policyholders.

The article, entitled “Travelers Cos. Settles Shareholder Lawsuit,” may be found on page A8 of the January 2, 2008 edition of The Wall Street Journal.