State officials said they have fined Marsh insurance brokerage$75,000 for overcharging 22 Oregon public entities more than $1.4million in commissions over a five year period.

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The announcement was made by the Oregon Department of ConsumerBusiness and Services (DCBS). The state's Department of Insuranceis part of DCBS.

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The overcharges, which ran from 1999 to 2004, involved schooldistricts, colleges, counties, cities and public agencies,according to the insurance department.

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"We hold the insurance industry to high standards of trust andrequire careful record keeping," said Cory Streisinger, director ofDCBS.

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She added, "Policyholders and clients have a right to expecttheir broker or agent to handle accounts honestly and fulfill theircommitments, and we will not accept industry practices that fallshort of that expectation."

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DCBS said the overcharges involved the receipt of commissionsfrom insurers in addition to the payment of a fee for servicesagreed to by the public entities. Marsh failed to inform the publicentities of the additional commissions.

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Last fall, Marsh voluntarily returned $1.2 million in overbilled commissions to six Oregon school districts and a communitycollege, the department said. A subsequent investigation by DCBSfound an additional $260,000 in overcharges involving other publicentity clients.

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Marsh has since either returned the money or issued credit tothe other affected public operations, the department said.

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Three people who were involved in the scheme, Robert Lilly, asenior vice president of Marsh, Debora Leopold Hutchins and PatsyG. Hanson, were terminated by Marsh, officials said.

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The insurance department is moving to revoke Mr. Lilly'sinsurance broker license. Ms. Hutchins and Ms. Hanson are underinvestigation by the department.

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Steve Corson, a spokesman for the DCBS, said by e-mail that areview of other brokers has "found no cause to investigate furtherat this time."

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The fine and reimbursements are not connected to thereimbursement settlement agreement Marsh & McLennan, Marsh'sparent company, entered into with New York's Attorney General EliotSpitzer involving contingent commissions, he said.

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MMC entered into the agreement in New York to settle charges itrigged bids and accepted insurers' hidden commissions in exchangefor steering clients their way.

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According to Mr. Corson, the Oregon action does not affect anyof the department's own inquiries that may be underway concerningcontingent commissions.

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The department expects to take no further action against Marsh,he added.

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Barbara Perlmutter, senior vice president of public affairs forMMC said, "We brought this matter to the attention of the OregonInsurance Division last year and have worked, cooperatively, tocorrect these problems.

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"We paid full restitution to the 22 public entities. The OregonInsurance Division also concluded that there was no improperconduct involving Marsh's private sector accounts.

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"We are also pleased to note that earlier today, the OregonInsurance Division, like 23 other insurance commissioners acrossthe country signed the agreement that MCC reached with the NationalAssociation of Insurance Commissioners on Sept. 21, 2005."

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