Feds Apparently Join Spitzer Insurance Probe

November 5, 2004 (PLANSPONSOR.com) - Federal regulators have apparently joined the ongoing probe by New York state Attorney General Eliot Spitzer into allegations that major insurance companies have carried out potentially illegal sales practices.

Prudential Financial included the revelation into a US Securities and Exchange Commission (SEC)  filing that it had gotten information demands from the SEC,   the US Department of Labor (DoL), Spitzer, and Connecticut Attorney General Richard Blumenthal about contingent commissions paid to insurance intermediaries and other matters “that may be viewed as anti-competitive.”

Prudential said it may well get additional regulatory demands on the matter and that other insurance providers had gotten similar information requests. Said the company in the SEC filing: “We are cooperating fully with these inquiries.”

Spitzer sued Marsh & McLennan October 14 for allegedly rigging bids and accepting payments in return for steering business to favored insurers (See Spitzer Takes On Contingent Commissions ). The suit, which implicated the largest firms in the industry including American International Group, has spawned other investigations by attorney generals in a number of states including California, Florida, Massachusetts, Ohio and Connecticut.