ALBANY, N.Y. — New York Attorney General Eliot Spitzer sued insurance giant Marsh & McLennan and implicated American International Group and several others Thursday, alleging brokers have been taking payoffs from insurance companies to steer corporate clients their way rather than get the best prices for policies, as they are required.
Two AIG executives pleaded guilty to participating in the illegal conduct and are expected to testify in future cases, Spitzer said in announcing the broader investigation into whether brokers and companies violated fraud and antitrust laws and regulations.
The victims were mostly large corporations that were deceived into buying property and casualty coverage that may have cost more, but also included small and mid-size businesses, municipal governments, school districts and individuals, Spitzer said.
Spitzer announced the civil suit against Marsh & McLennan Cos. of New York, the nation's leading insurance brokerage firm, accusing it of steering clients to insurers for lucrative payoffs under long-standing agreement. The firm collected $800 million in so-called contingent commissions in 2003 alone, investigators said. Spitzer also accuses the company of soliciting rigged bids for insurance contracts. The practices go back to at least the 1990s, he said.