Broker Accused of Rigging Bids for InsuranceEliot Spitzer, the New York state attorney general, yesterday accused the world's largest insurance broker of cheating customers by rigging prices and steering business to insurers in exchange for millions of dollars in kickbacks.
The lawsuit brought by Mr. Spitzer against the broker, Marsh Inc., a unit of the Marsh & McLennan Companies, contends that Marsh conducted sham bidding to mislead customers into thinking that they were getting the best price for the coverage they needed. The lawsuit cites several examples of customers - including Fortune Brands, which sells Titleist golf balls and Jim Beam spirits, and the school district of spirits, and the school district of Greenville, S.C. - that were misled that way.
In addition to the lawsuit, two executives of the American International Group, one of the world's largest insurance companies, pleaded guilty to criminal charges of rigging bids with Marsh.
While Mr. Spitzer's target yesterday was Marsh, he made clear that he was taking aim at a widespread practice in the insurance industry. "This investigation is broad and deep and it is disappointing," he said.
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