N.Y. Regulator Postpones MMC Hearing
By Mark E. Ruquet
NU Online News Service, Nov. 22, 11:52 a.m. EST?The New York Insurance Department's plan to call Marsh & McLennan Companies for a hearing tomorrow to explain allegations of bid-rigging and other misconduct has been postponed until next year.[@@]
The department said the hearing has been rescheduled to Jan. 18, 2005. No time for the hearing was set.
The department said it postponed the hearing due to the ongoing joint investigation by the department and New York Attorney General Eliot Spitzer's office.
In October, Mr. Spitzer announced a suit against New York-based MMC, charging that it's insurance brokerage division, Marsh Inc., used bid-rigging and other manipulation of insurance contract placements in return for profitable market service agreements, a form of contingency fee commission based on account volume.
At the time of the announcement of the suit against MMC, New York Insurance Superintendent Gregory V. Serio said there would be a review of Marsh's license. He added that the outcome of the case could change regulations governing commercial insurance.
Mr. Spitzer's suit led to the ouster of MMC's Jeffrey Greenberg, chairman and chief executive officer, and the removal of at least six other executives in the company. In addition, five insurance company executives with American International Group and Ace Ltd. have pleaded guilty to criminal charges.
MMC's new head, Michael G. Cherkasky, president and CEO of MMC, and chairman and CEO of Marsh, was forced to make cost cutting moves after the company abandoned contingency fee commissions in the wake of Mr. Spitzer's revelations. The projected loss of more than $800 million in revenue led to 3,000 layoffs within MMC.
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