Connecticut Probes Agent Abuses

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Connecticut Attorney General Richard Blumenthal says he has evidence some consumers buying auto or homeowners insurance have been misled about agents' compensation, and he expects to bring legal action or seek settlements as a result.

If Blumenthal discloses specific allegations, it would be the first evidence of commission-related abuses in personal lines since New York, Connecticut and other states launched probes of the industry.

"We have found very specific troubling evidence of steering and contingent commissions that are undisclosed to consumers and may raise the price of insurance," Blumenthal said in a recent interview.

Asked whether he knows of consumers who were not given information about agent commissions when asked, Blumenthal said, "We have found instances of misleading or deceptive statements in our view, whether in response to questions or otherwise."

Contingent commissions are not illegal, and Connecticut has no law yet requiring disclosure of the commissions to insurance buyers.

However, contingent commissions "can violate our consumer protection laws if there is deception or non-disclosure that misleads consumers or leads to decisions that otherwise would not have been made," Blumenthal said. "The issue really is one of loyalty and honesty."

He said legal action or settlements concerning personal lines might involve Connecticut insurers or agents.

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