New Class Action Seeks Corporate Death Sentence
A Massachusetts attorney filed a prospective class-action suit in federal court last week, charging that Marsh & McLennan Companies Inc. raised the cost of insurance coverage for clients by rigging bids and taking kickbacks from four major insurers.
Robert J. Bonsignore, of Medford, Mass., said that in addition to asking for reimbursement of overcharges for consumers, the suit seeks punitive damages as well as an injunction to stop illegal activity. He added that he hopes the suit will force the ouster of all the companies' top management.
The suit is the latest private action filed since New York Attorney General Eliot Spitzer and other agencies began investigating allegations of bid-rigging and contingency fee abuse. Mr. Spitzer in October filed a civil suit against MMC and a number of insurers, charging they conspired to manipulate the market in violation of state antitrust law.
Besides MMC, the parent of Marsh brokerage, the Massachusetts action names American International Group, ACE Ltd., Hartford Financial and MetLife Inc. as defendants.
Mr. Bonsignore, a partner at Bonsignore & Brewer, said the single named plaintiff representing consumers, whom he alleges were victimized, is Brendan McCush, a Boston resident who was sold auto insurance directly by an MMC outlet.
The suit, filed in U.S. District Court in Boston, alleges the defendants violated anticorruption, consumer-protection and antitrust laws.
Marsh, in a November Securities and Exchange Commission filing, reported that 15 prospective class actions had been filed against it as a result of the bid-rigging charges.
Executives at the firms "need to get the corporate death sentence," Mr. Bonsignore said, adding that he hopes his suit will prompt the boards of the various defendants to oust the senior managers in charge during the alleged misbehavior. The companies involved had no immediate comment.
Mr. Bonsignore said that as part of his litigation he will seek to force admissions from the companies that rate increases for consumers "were attributable to these fraudulent schemes."
Reproduced from National Underwriter Edition, January 27, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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