Marsh & McLennan Settles Probe
Marsh & McLennan Cos. has settled an investigation by California into its commission practices, state Insurance Commissioner John Garamendi said Monday.
New York-based Marsh will not be fined, but will disclose commission agreements and end bid-rigging practices, the insurance commissioner said.
In January 2005, Marsh agreed to pay $850 million to settle a lawsuit by New York Atty. Gen. Eliot Spitzer accusing it of rigging bids, fixing prices and steering business to insurers that paid fees hidden from clients. Marsh has scrapped those fees, known as contingent commissions.
About $100 million from the New York settlement will go to California policyholders, Garamendi said.
Marsh spokeswoman Barbara Perlmutter said the California agreement mirrored the one with Spitzer. Insurance commissioners from 33 states have signed onto the New York agreement, she said.
The settlement with California calls for Marsh to clearly disclose commissions, not accept false or inflated quotes, and not put its own financial interest ahead of its clients’.
Marsh will pay $15,000 for the California investigation’s costs, said Norman Williams, a spokesman for Garamendi.
Marsh shares slipped 19 cents to $30.25. They are down 4.8% year to date.