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"                      <p class=\"imgtitle\">Blumenthal</p>           HARTFORD, Conn. (Legal Newsline) - A first-in-the-nation court victory has been declared by Connecticut Attorney General Richard Blumenthal against the insurance arm of Wells Fargo.<br /><br />Blumenthal alleged the company failed to tell consumers about hidden kickbacks the company paid in exchange for favoring a group of \"preferred\" insurers.<br /><br />Acordia Inc., now owned by Wells Fargo, had a fiduciary duty to be open and honest with its clients, the court ruled, noting that Acordia violated that trust.<br /><br />\"This case is a significant victory for insurance consumers -- and honest, competitive businesses that were illegally shut out of the market by Wells Fargo's exclusive pay-to-play club,\" Blumenthal said. <br /><br />\"This victory is the first of its kind in the country -- a resounding message to insurance brokers about their legal duty to be open and honest with clients.\"<br /><br />This decision, Blumenthal said, will have a significant impact on law enforcement cases involving such practices. Blumenthal also said it was a profound victory for insurance consumers and businesses statewide.<br /><br />Blumenthal alleged that Wells Fargo's secret agreements, known as the \"Millennium Partnership,\" broke the law. The Millennium Partnership paid Wells Fargo undisclosed commissions in exchange for giving insurers involved the \"first shot\" at selling insurance to its customers.<br /><br />These hidden commissions, which were often only negotiated with a small number of insurers, were in addition to the normal sales commission and other standard sales incentives that Wells Fargo received for each policy it sold, Blumenthal said.<br /><br />Wells Fargo, Blumenthal's case alleged, should have disclosed to clients that, for every insurance policy sold on behalf of its \"preferred\" stable of national insurers, it received a kickback.<br /><br />Acordia initiated the \"Millennium Agency System Partnership\" in Jan. 1999 to obtain financial support over a three year period to offset the costs associated with launching \"AMS Segetta,\" a new agency management system to directly link its offices through the Internet with \"partner\" insurers and provide an \"inside track\" for future business with Acordia.<br /><br />Insurers Atlantic Mutual, Chubb, The Hartford, Travelers, and Royal SunAlliance had agreed to participate in the plan by Aug. 1999, Blumenthal said. <br /><br />The consequences to those who refused to participate were made clear by Acordia, with one former senior vice president and chief marketing officer informing Kemper Insurance, which declined to participate, \"Please let me know if we can find a solution before our marketing plans for the next 18 months exclude you from growth potential,\" Blumenthal said.<br /><br />A state court judge agreed with Blumenthal's lawsuit, noting that Wells Fargo held a fiduciary duty to its clients and should have disclosed when it accepted contingent commissions from insurers as such commissions represent a conflict of interest.<br /><br />The court ruled that \"the Millennium Partnership constituted a conflict of interest between Acordia and its clients because under the Millennium Partnership Acordia received more money when Millennium insurer products were sold to Acordia clients.\"<br /><br />No settlement dollar amount was ruled on by the court, which ordered Wells Fargo to identify and disclose how much money it earned through its illegal practices.<br /><br />The state's case against Wells Fargo is the first in the nation to go to trial on the issue of whether an insurance broker owes a fiduciary duty to its clients to disclose so-called contingent commissions.<br /><br />\"This decision confirms our hard-fought position: secret agreements and kickbacks are bad for businesses and bad for consumers,\" Blumenthal said.\""^^<http://www.w3.org/2001/XMLSchema#string>
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