Nine states have reached a $7 million settlement with New York-based insurance broker Marsh, Inc., a unit of Marsh & McLennan Companies, Inc., resolving a four-year investigation into Marsh's role in a nationwide bid rigging scheme.

Marsh allegedly made collusive arrangements whereby mega-brokers entered into agreements with insurers to receive undisclosed compensation and engaged in anticompetitive conduct in the market for commercial liability insurance. In January, 2005, Marsh agreed to a much bigger settlement with then New York Attorney general Eliot Spitzer over similar allegations. Marsh agreed then to set up an $850 million fund to compensate clients.

Under the terms of the states’ agreement, Marsh must disclose to its clients all compensation received from insurance companies in connection with the placement of an insurance policy, obtain the client's written consent to the compensation, and disclose at the end of each year annual totals of compensation received in connection with a client’s policy.

This latest settlement of $7 million is being divided among Florida, Hawaii, Maryland, Massachusetts, Michigan, Oregon, Texas, West Virginia and Pennsylvania. The Florida Department of Financial Services and the Florida Office of Insurance Regulation also joined these states’ attorneys general in the settlement.

Marsh Settles Insurance Bid-Rigging Charges (Insurance Journal 1/7/09)

January 8, 2009