New Spitzer Suit Attacks Life Broker, Big Insurers
By Daniel Hays
NU Online News Service, Nov. 12, 4:23 p.m. EDT?The New York attorney general and insurance department probe of broker contingency fees today resulted in a life and disability insurance broker being slapped with a civil suit and citations.[@@]
The lawsuit by Attorney General Eliot Spitzer's office was directed at Universal Life Resources in San Diego, which was accused of steering business in exchange for payoffs from large insurers–including MetLife, Prudential and Unum Provident. The insurers were not named as defendants.
Mr. Spitzer issued a statement saying that the "corrupt practices" revealed in an earlier lawsuit charging Marsh Inc. brokerage with taking kickbacks from insurers in exchange for steering business their way at inflated prices are "present in additional sectors of the industry."
He called the ULR case "particularly egregious" because it had jacked up the cost of insurance to employees at firms for which ULR secured coverage.
The suit in New York Supreme Court Manhattan–a county-level venue–named ULR Chief Executive Officer Douglas Cox and affiliated corporations Universal Life Resources and Benefits Commerce.
The suit seeks punitive damages, an end to secret agreements, disgorgement of improper payments and restitution for injured parties.
New York Insurance Superintendent Gregory V. Serio set a Dec. 14 hearing for the companies and Mr. Cox, at which they must answer charges that they used fraudulent, coercive and or dishonest practices and demonstrated untrustworthiness in their sales of group life and disability insurance to employers.
"These inflated costs were unknowingly borne by employees of these corporations," Mr. Serio said.
In 2003 ULR had revenues over $25 million.
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