Spitzer Probe Looks At Professional Liability
By Mark E. Ruquet
NU Online News Service, Dec. 7, 9:51 a.m. EDT?Two insurance carriers have announced that New York Attorney General Eliot Spitzer has subpoenaed them for information about professional liability insurance for law firms. [@@]
The latest subpoenas appear to indicate yet another aspect of the ongoing industry investigation by Mr. Spitzer, which first drew headlines when he announce a lawsuit concerning commercial insurance broker fees charged by Marsh.
Both Hamilton, Bermuda-based Arch Capital Group, Ltd., and Cincinnati-based American Financial Group Inc. said they have received the latest subpoenas.
Arch said that its Arch Insurance Group received a subpoena requesting "certain information concerning its underwriting activities with respect to insurance coverages to lawyers and law firms for acts of professional malpractice."
American Financial said its property-casualty subsidiary, Great American Insurance Company, received a subpoena for information concerning business practices in writing legal malpractice insurance. Both firms said they plan to cooperate.
AFG added that it believed the subpoenas were part of the probe that has swept the industry over contingency fee commission abuse.
The company added that it "believes there to be nothing illegal or improper with its business practices. AFG's internal investigation following previously disclosed inquiries from state regulators is ongoing."
In the past, statements by insurance brokers and carriers have indicated Mr. Spitzer's office asked for general information concerning contingency fee commission payments, but did not identify any particular line of business.
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