Marsh & McLennan accused of price fixing, agreements
NEW YORK - The greatest nation on the insurer are in a brewing scandal that many leaders fear that the industry could shake on their core competencies.
After months of complaints from the industry, according to caretaker, New York Attorney General Eliot Spitzer the first Salve against the alleged conflicts of interest Thursday, collecting insurance brokerage arm of Marsh & McLennan (MMC) with price fixing and cartels.
A scathing civil suit poses Marsh favorite insurer to control customers and working with major insurers rig on the property tenders for accident insurance. The complaint said the victims ranged from large companies and schools districts to individuals.
In addition to the civil complaints, Spitzer pleaded guilty on two pleas in criminal charges against the two leaders at the American International Group (AIG). They cooperate with the investigation, the giant could ensnare other insurance and staff.
“This investigation is the Fang as a trail of fire. These costs spread over other insurance companies and brokerages,” Spitzer said in an interview. “The whole business model of the branch, but seems to be the kind of serious problem in our complaint.”
Some of the greatest nation insurance companies are accused of Spitzer’s suit steering and bid rigging, including AIG, ACE (ACE), The Hartford (HIG) and Munich American Risk Partners. Other insurance companies are examined in a pattern, “said Spitzer accuses all insurance premiums.
Wall Street reacted sharply Thursday, wipe you over $ 26 billion in market value of four companies traded on USA. Munich is a subsidiary of the German company Munich Re. Marsh and others in the complaint said they are cooperating with Spitzer.
Some analysts have quickly pointed out that the family a connection to the Spitzer probe. Business legend Maurice “Hank” Greenberg AIG is underway, while his son Evan and Jeff Presidents are Marsh & McLennan and ACE, respectively. Spitzer said he had no indications on a family ties to the scandal.
Most observers expect, industry Spitzer investigation on the reform and trigger mass actions.
John Stoia complainant lawyer, brought civil actions against Marsh & McLennan, Aon and Willis Group in California and New York - even denounced the most unfair practices in New York, the Attorney General of the complaint - said in a statement that the company has been wrong “represented, as an honest broker to offer their customers the best coverage many insurers on the lowest costs, (but) they lead rather than too few companies, they gave bribes of wine and other payments. ”
Spitzer said his investigation of six months was triggered by an anonymous letter and the Washington Legal Foundation, a conservative public policy Think Tank, in February, requested that the regulatory authorities in New York and California to the probe said contingent commissions.
The industry trade group, the Council of Insurance Brokers & officer, responded to these words, he believes that regulation, in the heart of Spitzer commissions and accusations of conflicts of interests, have been proved right.
Last month, Marsh disclosed few contingent commission in the context of data and their code of conduct. At the time, Marsh CFO Sandra Wijnberg, said: “What we found is that the largest customers have already been quite expert, and they have not been particularly exciting.”
This has little to satisfy Spitzer, found that Marsh received $ 800 million in contingent commissions during the year 2003, more than half of the 1.5 billion dollars of net profits. Spitzer said that during the first contact Marsh executives, she says, “you do not have time.
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