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-Caveat Lector- Maybe NOW, NEXT, someone in high places will have the courage to take on the HEALTH insurance industry, which is even more corupt ...President Bush blames skyrocketing health care costs (higher profits for them) on the expense of addressing "frivolous lawsuits." (Will insurers raise prices higher to pay for JUSTIFIED litigation?)Insurance probe widens,Marsh reportedly suspends workerswww.ctrl.org DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply.
By EILEEN ALT POWELL
AP Business Writer
October 20, 2004, 11:34 AM EDT
NEW YORK -- An investigation into insurance industry sales practices launched last week by the New York attorney general has widened to other states, and an increasing number of insurance companies have reported receiving subpoenas.
In New York, the brokerage firm at the center of the probe, Marsh & McLennan Companies Inc., suspended four workers whose names have been connected with Attorney General Eliot Spitzer's lawsuit, The Wall Street Journal reported.
A company spokesman on Wednesday declined to comment on the report.
Spitzer has accused Marsh & McLennan of bid rigging and using incentive fees to manipulate the sales of corporate property and casualty policies. As a result, businesses have paid more than necessary for their coverage. Spitzer pledged to look at other forms of insurance, too.
On Wednesday, the Boston Globe reported that Liberty Mutual Insurance Co., one of the nation's top five property and casualty insurers, had received subpoenas in the Spitzer probe. The company declined comment on the report.
Meanwhile, Dutch-based ING Groep NV, one of the world's largest insurers, said Wednesday it received a subpoena from Spitzer's office.
"We've been asked to provide information," ING spokeswoman Dailah Nihot said, adding Spitzer requested "general" information. "We are fully cooperating with the authorities," she said.
In morning trading, insurance companies continued to take a beating.
Marsh & McLennan shares were off 95 cents at $23.15 on the New York Stock Exchange. Its shares have fallen nearly 50 percent in value since the Spitzer probe was announced last Thursday.
The shares in companies named by Spitzer in connection with the March & McLennan suit also were down on the NYSE, including American International Group, off 90 cents at $56.80; ACE Ltd., down 63 cents at $32.52, and Hartford Financial Services Group Inc., down a penny at $53.28.
ING's shares fell more than 4 percent in trading on the Euronext stock exchange.
In addition to New York, regulators in two other states have announced investigations.
Connecticut Attorney General Richard Blumenthal's office on Tuesday issued at least 20 subpoenas to insurance companies and brokers.
Blumenthal said he's convinced bid-rigging and other fraud is occurring in Connecticut, The Hartford Courant reported.
"The focus of our investigation is bid-rigging and price-fixing that essentially cripples competition and raises insurance costs for corporate citizens and ordinary consumers," Blumenthal said. He did not name the companies that are being subpoenaed.
In California, Insurance Commissioner John Garamendi has said he will go to court to challenge hidden fees paid to brokers who promote certain policies without telling customers they have a financial incentive to do so.
"In California, that's illegal," Norman Williams, a spokesman for Garamendi, said. "The commissioner does plan to seek some kind of civil action to correct these practices."
The Wall Street Journal reported Tuesday that Garamendi would file the suits within the next two weeks against several companies that sold personal insurance, including life, auto and homeowners' policies.
Marsh & McLennan reportedly suspended William Gilman, executive director of marketing at Marsh Global Broking and a managing director; Greg Doherty, a senior vice president in the group's excess casualty division; Edward McNenney, a brokerage executive, and Gilman's daughter, Samantha Gilman, the Wall Street Journal said.
The paper said Spitzer's office was looking into their roles in pressuring insurance companies to offer fake bids for insurance policies.
Two employees from AIG and one from ACE already have entered guilty pleas in the case.Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at:
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