ELIOT SPITZER, the New York attorney-general, and the state’s insurance regulator yesterday reached a $2 million (£1.1 million) settlement with Universal Life Resources, an insurance and benefits consulting firm accused of fraud.

Under the agreement, Douglas Cox, the chief executive of Universal Life Resources (ULR), and his affiliated companies will provide $2 million in restitution to policyholders across the United States harmed by the firm’s actions.

ULR also will adopt new business practices and fees to avoid conflicts of interest.

In November 2004, Mr Spitzer and New York’s insurance commission alleged that ULR received undisclosed payments from some of America’s largest life insurance companies, including MetLife, Prudential and UnumProvident, in return for steering business to them.

The complaint also alleged that ULR imposed secret fees for “communications services” far above market rate.

ULR agreed to charge a single fee or commission for its services in future, ending the practice of soliciting contingent commissions and communication fees. It also agreed that all forms of payment be approved by its clients.

ULR has also agreed to a monitoring of its insurance- related business practices for a period of five years.

The case adds to Mr Spitzer’s tally of high-profile settlements in cases of alleged corporate irregularity.

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