(Bloomberg) ? Connecticut Attorney General Richard Blumenthal added new allegations of bid rigging, price fixing and illegal steering to a lawsuit against Marsh & McLennan Cos., the world?s largest insurance broker.

He also settled with ACE Ltd. and dropped the company from the suit, originally filed in January.

?We have uncovered powerful evidence of a systematic scheme to raise insurance prices,? Blumenthal said in a statement yesterday. ?We also have strong evidence of bid rigging, victimising specific Connecticut consumers and companies.?

Marsh & McLennan paid $850 million in January to settle accusations of bid-rigging brought by New York Attorney General Eliot Spitzer, a suit led that to the ouster of chief executive officer Jeff Greenberg. Massachusetts Attorney General Tom Reilly intends to sue Marsh for deceiving customers by soliciting fake quotes and steering clients to insurers that paid hidden fees.

The Connecticut suit alleges that when customers wanted to buy or renew insurance, Marsh brokers decided which insurer to give the business to and at what price at an increase of 15 to 20 percent.

?Marsh concocted a free market mirage,? Blumenthal said in the statement. ?In reality, it coerced insurers into a `pay to play? scheme.? He seeks money back for Connecticut individuals, companies and other entities.

In his original complaint, Blumenthal accused ACE of paying a secret $50,000 fee to win an $80 million workers? compensation contract. ACE will pay $40,000 to settle the allegations. It will continue to handle workers compensation claims for Connecticut, the company said.