Florida Attorney General Charles J. Crist Jr. has sued Marsh & McLennan Cos. Inc., echoing earlier charges by other officials that the worlds largest brokerage illegally engaged in bid rigging and manipulated insurance markets to obtain improper commissions.
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In a joint action filed Tuesday in Leon County Circuit Court in Florida, Mr. Crist and Tom Gallagher, chief financial officer of the Florida Department of Financial Services, charge MMC and three of its subsidiaries with numerous violations of Floridas Racketeer Influenced and Corrupt Organization Act and antitrust statutes.
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"It is clear that this company took advantage of its clients," Mr. Crist said in a statement. "Florida citizens and companies were cheated out of the best rates on insurance and did not receive the honest professional advice they paid for."
Progressive insurance middleton,wi MMC attorney Barry Richard blasted the lawsuit, saying in a statement that it "never should have been filed" and that "it distorts the facts, disregards the events of the past 18 months and ignores releases signed by the state of Florida itself."
MMC brokered approximately 15,000 insurance contracts in Florida from 1998 through 2004, according to Mr. Crists statement. While a majority of MMCs clients in the state are large corporations, they also include more than 50 public entities, as well as some small businesses and individuals.
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Mr. Crist is the latest attorney general to file bid-rigging charges against MMC in the wake of New York Attorney General Eliot Spitzers 2004 fraud and bid-rigging suit against the brokerage. MMC settled that suit in January 2005, agreeing to pay $850 million to clients nationwide and to change its practices.
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Last September, Connecticut Attorney General Richard Blumenthal amended his pending lawsuit against MMC to include new allegations of bid rigging, price fixing and illegal steering (BI, Sept. 26, 2005).
Meanwhile, California Insurance Commissioner John Garamendi said Monday he reached an agreement with MMC to resolve his investigation into alleged improper practices at the brokerage, including bid rigging and client steering.
The settlement calls for the adoption in California of the business reforms set forth in MMCs settlement with Mr. Spitzer. MMC paid no fines or penalties but agreed to reimburse the state $15,000 for the costs associated with its investigation.
Mr. Garamendi is the 34th state regulator to reach a settlement with MMC. Last September, MMC reached a multistate regulatory agreement with various state insurance regulators working collaboratively through the National Assn. of Insurance Commissioners.