St. Paul-Travelers has agreed to pay $77 million to settle charges of bid-rigging. Basically, the insurance company would pay brokers to “fix bids” and make sure that the insurer was the low bidder on certain accounts.
Very nice. (Yes, that was sarcastic.) You have to like an insurance company that rigs bids so that it can get work. They apparently cannot compete on price so they have to pay millions of dollars to get work. That, to me, does not seem like the free market system.
And if this were a one shot deal it would be bad enough. Since 2004, insurance companies have paid $3 BILLION to cover allegations of the same thing. They sure are spending a lot of money on bid rigging and then the fines.
How about this for an idea: charge a fair premium and then pay what you owe on claims in a timely manner? Sounds like a profitable business model to me.
Remember, when you are shopping for insurance, shop around. This is one more reason why it is so important.