NEW YORK — ACE Ltd. on Thursday became the latest insurance company to announce changes in its business practices in response to the industry probe launched by New York's attorney general.
The Bermuda-based firm also disclosed in a statement that it had fired two employees, including ACE Casualty Risk president Geoffrey Gregory, and suspended three others.
The other ACE employee who was dismissed was Patricia Abrams, who last month entered a guilty plea to criminal misdemeanor charges of bid rigging. Abrams, who is believed to be cooperating with New York investigators, was an assistant vice president in ACE's excess casualty unit.
The three suspended employees "worked in ACE Casualty Risk on a team within the excess casualty unit that did business principally with Marsh Global Broking," ACE said.
It was a reference to a division of New York-based insurance broker Marsh & McLennan Companies Inc. that is at the center of a probe launched Oct. 14 by New York Attorney General Eliot Spitzer. Spitzer, in a civil suit, has accused Marsh & McLennan of bid rigging, price fixing and heavy use of incentive fees, sometimes called marketing service agreements or placement service agreements. These are fees paid to brokers over and above regular commissions by insurance companies in exchange for getting more business.
The practices by the nation's largest insurance brokerage resulted in businesses being forced to pay more than necessary for property and casualty policies, Spitzer contends.
ACE is among several insurance companies mentioned in Spitzer's suit, but it has not been charged with any wrongdoing.
In its announcement Thursday, ACE said it would adopt guidelines and procedures that would "avoid real or any appearance of conflicts of interest." Among the new practices:
Disclosure on all commercial policies of any commissions paid to brokers. ACE earlier outlawed incentive fees.
Appointment of a business practices compliance officer.
Hiring an outside consultant to review and recommend changes in employee training, compliance and control.
Naming Peter Mear, the company's general counsel, as chief ethics officer.
"These new business practice compliance programs will support and strengthen our companywide commitment to ethical conduct," president and chief executive Evan Greenberg said in the statement. "Our internal investigation is ongoing, and we will continue to look for further ways to enhance our business culture."