Marsh & McLennan Companies said it amended its settlement agreement with New York State over alleged price-fixing and brokerage fee misconduct to limit its application to its U.S. operations.
In its 10-Q filing of May 6, New York-based MMC said the office of the New York Attorney General and the state's superintendent of insurance agreed to alter the language in the agreement by inserting "U.S." into sections of it. The change limits the scope of business reforms that were agreed to so that overseas operations are exempt, MMC said.
In January, MMC agreed to put $850 million into a settlement fund that will be paid to insurance clients whose contract placements were affected by contingent fees the broker collected from insurers that may have been part of a scheme to rig bids and fix prices.
New York Attorney General Eliot Spitzer's office alleged in a civil suit that executives at MMC's insurance brokerage firm–Marsh–engaged in fraud and illegal kickbacks as part of contingency fee arrangements with carriers. MMC agreed to the settlement without admitting guilt, but apologized for the actions of some executives, and is making dramatic changes in its compensation and business practices.
To date, three Marsh executives have pled guilty to criminal charges stemming from the probe, along with seven executives from insurance companies.
In addition to clients of Marsh, the agreement also affects clients of Mercer Consulting–another MMC subsidiary. Mercer received contingent fee commissions while consulting on the placement of insurance, according to MMC.
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