Massachusetts State Attorney General Tom Reilly is threatening to sue Marsh & McLennan Companies Inc. if a settlement can't be reached over allegations that the firm did not serve its insurance clients properly.
In a letter to Michael G. Cherkasky, MMC's president and chief executive officer, dated Sept. 8, the attorney general's office said it has reason to believe the New York-based insurance firm engaged in "unfair or deceptive acts or practices" violating the state's consumer protection law.
MMC filed an 8-K on Sept. 12, advising that an attorney general intended to sue the firm on Sept. 13 if a resolution could not be met. The company did not name the attorney general in the filing.
In January, without admitting guilt, MMC agreed to pay $850 million to clients to settle a civil lawsuit filed by New York State Attorney General Eliot Spitzer. The suit alleged that MMC's brokerage firm, Marsh, engaged in bid-rigging and steering commercial insurance business to carriers that paid lucrative volume-based contingent commissions.
A total of 17 companies allegedly harmed by MMC were named in the attorney general's letter. They included Massachusetts Mutual Life Insurance Company, Gillette, Ahold and the University of Massachusetts. The attorney general indicated the list was not limited to the 17.
The attorney general's office did not respond to a request for additional comment on the status of the action.
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