Connecticut adds to Marsh & McLennan suit

Reuters
September 22, 2005


NEW YORK, Sept 22 (Reuters) - Connecticut Attorney General Richard Blumenthal said on Thursday he amended his lawsuit against insurance broker Marsh & McLennan Cos. (MMC), adding new allegations of rigging bids and illegally steering contracts in the state.

"This marks an ongoing step in our investigation of a systematic effort by Marsh & McLennan to raise insurance prices in Connecticut," said Blumenthal.

Marsh would use its "extraordinary market power to make sure bids went to favored insurers," he said. The insurance broker would "threaten retaliation against anyone who resisted."

Marsh's practices forced Connecticut businesses to overpay by 20 percent for insurance coverage, the attorney general said.

A Marsh representative could not be immediately reached for comment.

If found guilty, Marsh would be subject to civil penalties for violating the state's antitrust law and consumer protection statutes, the attorney general said. He didn't specify the amount of damages. There aren't any criminal charges he can bring against the company or its officials, Blumenthal said.

Blumenthal's counterpart in New York State, Attorney General Eliot Spitzer, brought criminal charges against eight Marsh executives last week. They face penalties of up to 25 years in jail.

Spitzer settled with the company itself in January, which agreed to pay $850 million in penalties and changed its management. Blumenthal acknowledged that Marsh had reformed, but said, "We feel we have a responsibility to bring this action because of new and sweeping allegations."


© Reuters 2005



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