New Spitzer Probe? Crawford Subpoenaed

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 ongoing investigation of the insurance industry has apparently focused on yet another market segment-- claims management.[@@]

On Friday, Crawford & Company of Atlanta, Ga., one of the largest independent claims management operations, said it had received a subpoena from Mr. Spitzer's office. Crawford is the second third party administrator to be subpoenaed, but unlike the A. J. Gallagher subsidiary, Gallagher Bassett Services, Inc. of Itasca, Ill., which was subpoenaed Dec. 2, they are unaffiliated with a brokerage

The New York attorney general has previously issued subpoenas to insurers and brokers as his office examines sales practices for commercial insurance and health insurance and underwriting practices for legal malpractice insurance.

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

Tom Crawford, the company's chief executive officer, said he could not provide more details at this point as to what the investigation concerned, "we're trying to get information to see if it is specific to something. We've turned it over to our legal people 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 its activities it services and adjusts claims for workers' compensation, healthcare, property and casualty.

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

He told the U.S. Senate last month that in addition to his well publicized actions against brokers his office has "begun to look at other troubling areas of the insurance industry beyond steering and bid rigging."

At G.A.B. Robins, another large claims management firm in Parsippany, N.J., a spokesperson, when asked if the firm had been subpoenaed, said the company's general policy is not to comment on litigation matters.

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

Gallagher has been subpoenaed by the Connecticut Attorney General Richard Blumenthal concerning possible violations of the state's antitrust laws in connection with the solicitation of bids for insurance.

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