Connecticut state launches antitrust lawsuit against reinsurers

Connecticuts attorney general Richard Blumenthal has launched an antitrust lawsuit against 10 reinsurers, alleging anticompetitive practices that inflated insurance costs for insurance companies and consumers.
The attorney generals allegations have not been proven in court. The principle defendant in the case, Guy Carpenter & Company LLC, says it plans to defend itself vigorously in the resultant legal action.
The Connecticut Attorney Generals complaint is based on a fundamental misunderstanding of reinsurance facilities that have been in operation for the benefit of small- and mid-sized clients for as long as 50 years, Guy Carpenter said in response to the accusations. Simply put, there is no basis for the attorney generals lawsuit and we intend to defend ourselves vigorously.
In a press release announcing his legal action, Blumenthal specifically accuses Guy Carpenter of funnelling lucrative business to select inner circles of reinsurers or facilities in exchange for excessive fees and other benefits from these reinsurers.
He further states in his release: Reinsurers included in these facilities agreed not to compete against the prices and terms set by Guy Carpenter or another lead reinsurer and instead agreed to be bound by the same prices and terms as the other participants.
Blumenthal said in his release that his active and ongoing investigation will draw back the cloak of secrecy on industry practices that inflated prices and profits at the expense of 170 insurance companies and their customers. He further states that his governments antitrust investigation has revealed an entire industry plagued by pervasive anticompetitive and anti-consumer practices.
Other than Guy Carpenter, ten other reinsurers were named in the lawsuit, including: Farm Mutual Reinsurance Plan of Canada; Arch Reinsurance Company of Nebraska; Swiss Reinsurance America Corporation of Armonk, NY; and The Toa Reinsurance Company of America of New Jersey.