HRH Resignation May Signal New Direction for Brokerage Probes

Recent allegations involving the Hartford office of insurance broker Hilb Rogal & Hobbs may be taking investigators of broker compensation in a new direction.

HRH President Robert B. Lockhart resigned and another employee was fired after it was learned that the company’s Hartford office may have illegally given or received money as part of deals to place three clients with insurance companies.

The investigation of HRH raises the possibility that some insurers may have concealed bonus commissions in premiums, said Connecticut Attorney General Richard Blumenthal. “It’s a somewhat new direction, but the same industry and the same problem of consumers harmed by secret payments that ultimately distort and constrain competition,” he said.

Blumenthal said some clients or customers were obstetric-gynecology groups that purchased professional liability insurance.

“Very bluntly, what’s new about this scheme is that it may be contributing to the escalating cost of medical malpractice insurance,” he said.

“A lot of folks have been saying that anticompetitive conduct may be contributing to the inflationary cost of professional liability insurance. Now here is some reason to believe it may be true.”

According to the broker’s lawyer, HRH voluntarily brought these issues to the attention of the attorney general and is cooperating in the probe.

HRH is also being investigated by the state insurance department.