Benefits Firm Settles New York Case

Under the terms of the agreement, Cox has promised to pay the $2 million into a settlement fund, to help regulators calculate the amount of contingent commissions that clients paid, and to refrain from filing for bankruptcy for at least 220 days from the date of the settlement agreement, according to a copy of the agreement posted on the Web site of the New York attorney general’s office, at Document Link

To get restitution from the fund, clients must sign a release form and make a request by May 1. Cox will pay the clients as much as possible from the restitution fund June 1, according to the settlement agreement.

Cox has agreed to notify the New York attorney general and insurance superintendent of any bankruptcy case filed between the date of the settlement agreement and Dec. 31, 2007, at the earliest possible date. If a bankruptcy court voids the restitution payments, that will void the settlement agreement, according to the settlement agreement.

Cox also has agreed to accept only specified fees and commission percentages from clients and to describe those compensation arrangements for clients in writing. Cox and related companies may not accept trips, expense payments, contingent commissions, communication fees, or “pay to play” compensation from insurance companies, according to the settlement agreement.