Marsh Settles With 9 States Over Bid-Rigging Allegations

Marsh insurance brokerage will pay nine states a total of $7 million to settle a four-year probe of alleged bid-rigging that stemmed from a 2004 investigation commenced by then New York Attorney General Eliot Spitzer.

Massachusetts Attorney General Martha Coakley's office said the company settled allegations that it entered into agreements with certain insurers to receive undisclosed compensation and engaged in anticompetitive conduct in the marketing of commercial liability insurance.

Massachusetts said it would receive $1 million under the settlement.

The other states involved in the settlement were Florida, Hawaii, Maryland, Michigan, Oregon, Texas, West Virginia and Pennsylvania. The Florida Department of Financial Services and the Florida Office of Insurance Regulation also joined the other states in the settlement.

After an investigation in 2004 Mr. Spitzer charged that some Marsh brokers were engaged in creating false quotes with insurers in order to steer business to other insurers paying volume-based contingent commissions to the firm.

Marsh & McLennan, the parent company of Marsh, paid more than $800 million to New York state to settle the allegations. It also ceased taking contingent commissions, which resulted in a massive restructuring of the company.

Massachusetts said that as a result of its investigation it also recorded a $2.77 million settlement with Zurich American Insurance Company; a $680,000 settlement with ACE Group Holdings in Pennsylvania; a $1.3 million settlement from Travelers Insurance Co.; and a $1.3 million settlement with New York-based American International Group.

In a statement, Marsh said the agreement not only ends the investigations, but the State of Florida dismissed a lawsuit against the broker filed in 2006.

"This agreement represents another important step forward for Marsh," said Peter J. Beshar, executive vice president and general counsel of MMC.