Florida Sets Unit To Probe Insurance Brokers

NU Online News Service, Nov. 4, 4:29 p.m. EST?Florida has created a legal task force to investigate whetherbrokers and insurers in the state have been involved withbid-rigging, kickbacks and improper fees, the state's top insuranceregulator said today.

The announcement came from Florida's Chief Financial Officer TomGallagher, who said the unit would see if Florida firms are engagein any of the activities outlined in New York Attorney GeneralElliot Spitzer's civil suit against Marsh & McLennan Companiesand its brokerage unit Marsh Inc.

Mr. Spitzer as part of an ongoing investigation has alleged inhis suit that Marsh took payoffs from major insurers it steeredunwitting customers to after inflating prices through bid-rigging.Three persons have pled guilty to criminal charges in the case.

"If brokers and insurance companies are manipulating the law forpersonal gain and driving up insurance costs for consumers, then weneed to seek restitution where appropriate and take swift action toprevent further abuses," said Mr. Gallagher, who oversees theFlorida Department of Financial Services.

Don Dowdell, the department's Deputy General Counsel, will chairthe task force, and work with a team of lawyers and investigativestaff to scrutinize insurance broker and company sales practices.Mr. Gallagher has also asked Steve Burgess, Florida's InsuranceConsumer Advocate, to serve on the task force.

Mr. Gallagher said he is also directing the task force todetermine if legislative action is needed to require transparencyin insurance company transactions and agreements to prevent abusivepractices and protect the insurance-buying public.

His announcement today expands on a department spokesperson'sstatement to the National Underwriter yesterday that thedepartment was investigating.

In addition to Florida and New York, the issue of broker fees isalso being looked at by California, Connecticut, Ohio and NewJersey.