New Spitzer Probe? Crawford Subpoenaed

By Daniel Hays

NU Online News Service, Dec. 13, 2:30 p.m.EST?New York Attorney General Eliot Spitzer's ongoinginvestigation of the insurance industry has apparently focused onyet another market segment-- claims management.[@@]

On Friday, Crawford & Company of Atlanta, Ga., one of thelargest independent claims management operations, said it hadreceived a subpoena from Mr. Spitzer's office. Crawford is thesecond third party administrator to be subpoenaed, but unlike theA. J. Gallagher subsidiary, Gallagher Bassett Services, Inc. ofItasca, Ill., which was subpoenaed Dec. 2, they are unaffiliatedwith a brokerage

The New York attorney general has previously issued subpoenas toinsurers and brokers as his office examines sales practices forcommercial insurance and health insurance and underwritingpractices for legal malpractice insurance.

Crawford in announcing the subpoena said only that it requested"information of the company in connection with an investigation theNYAG is conducting. The subpoena seeks various documents related tothe operations of the company."

Tom Crawford, the company's chief executive officer, said hecould not provide more details at this point as to what theinvestigation concerned, "we're trying to get information to see ifit is specific to something. We've turned it over to our legalpeople and we'll wait and see.

He said Crawford is an independent firm that functions with the"ethics and honesty deserving of our clients."

Crawford lists 700 offices in 67 countries and among itsactivities it services and adjusts claims for workers'compensation, healthcare, property and casualty.

Mr. Spitzer has said previously that his office has found thatfavoritism, conflicts and secrecy rule the insurance marketplacerather than open competition.

He told the U.S. Senate last month that in addition to his wellpublicized actions against brokers his office has "begun to look atother troubling areas of the insurance industry beyond steering andbid rigging."

At G.A.B. Robins, another large claims management firm inParsippany, N.J., a spokesperson, when asked if the firm had beensubpoenaed, said the company's general policy is not to comment onlitigation matters.

A.J. Gallagher, in announcing the subsidiary's subpoena notedthat it has not been subpoenaed by Mr. Spitzer's office, unlikeAon, Willis Group and the Marsh brokerage. The latter has beenaccused in a civil suit of bid rigging with large insurers.

Gallagher has been subpoenaed by the Connecticut AttorneyGeneral Richard Blumenthal concerning possible violations of thestate's antitrust laws in connection with the solicitation of bidsfor insurance.

The brokerage said in October that it would end the practice oftaking contingency commissions by the beginning of next year.According to Mr. Spitzer brokers' contingency commissions have beenlinked to systematic fraud and market manipulation that sent highvolume business to a few insurers.