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Mercury General Corporation Message Board

  • boo_d_goo_d boo_d_goo_d Feb 16, 2005 6:59 PM Flag

    Guilty as charged.....................

    Part III

    With Tuesday's cases, Spitzer's office has now obtained nine guilty pleas from executives at four different companies. Previously, two executives at AIG, two from Zurich American, one from Marsh and one from ACE pleaded guilty to criminal charges.
    In January, Marsh executives insisted the wrongdoing was by a few individuals who violated company policy. The company agreed to pay $850 million in restitution to end Spitzer's investigation into bid rigging and price fixing.
    The company, which is based in New York, had hoped the settlement would end similar investigations by other states, including Connecticut, and private lawsuits. Marsh also issued and apology and promised to adopt reforms.
    The agreements -- also known as contingent commissions or placement service agreements -- are above ordinary commissions which brokers legally receive from insurance companies. That practice raised every policy holder's premiums.
    After the suit was filed, Marsh ousted Chairman and Chief Executive Officer Jeffrey Greenberg and named Michael G. Cherkasky, 54, as president and CEO. Cherkasky had been head of Marsh Inc., the company's insurance brokerage unit.
    In late October, Marsh announced it would permanently stop receiving contingency compensation from insurance companies, and several property and casualty insurance companies announced they would no longer pay such fees.
    Spitzer had claimed Marsh collected $800 million in contingent commissions in 2003 alone. Spitzer also accused the company of soliciting rigged bids for insurance contracts. The practices go back to at least the 1990s, he said.
    Associated Press Writer Michael Gormley in Albany, N.Y., contributed to this report.

 
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