Bermuda-based insurer Ace has settled with nine US jurisdictions over allegations that it colluded with broker Marsh in bidding on rigged insurance contracts.

Without admitting to charges of collusion, Ace has agreed to pay out $US4.5 million ($4.9 million) to the attorneys-general of eight states and the District of Columbia.

It is the second payment made by Ace over its alleged role in bid rigging uncovered by former New York Attorney-General (now Governor) Eliot Spitzer. He named Ace among other insurers for colluding in a bid-rigging scheme with Marsh in 2004.

In 2006, Ace paid $US80 million ($87 million) to the governments of New York, Connecticut and Illinois.