Reuters reports that California state Insurance Commissioner John Garamendi said that Marsh will not be fined, but will disclose agreements and end bid-rigging practices.
The settlement with California calls for Marsh to clearly disclose commissions, not accept false or inflated quotes, and not put its own financial interest ahead of its clients, according to Reuters. In addition, a spokesman for Garamendi said the insurance broker will pay $15,000 for the California investigation costs.
In January 2005, Marsh agreed to a $850 million settlement of a lawsuit by New York Attorney General Eliot Spitzer alleging that Marsh steered its clients to insurers with which it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts (See MMC Settles ‘Shameful’ Bid-Rigging Case). About $100 million from the New York settlement will go to California policyholders, Garamendi said.
A Marsh spokeswoman said the California agreement mirrors the one with Spitzer. Insurance commissioners from 33 states have signed onto the New York agreement, she said.
Marshall & Ilsley Corp. hit Marsh with a lagging contingent commission suit in January of this year (See Marsh Hit with Lagging Contingent-Commission Suit ).
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