Marsh finds 70,000 policyholders eligible for compensation

New York’s Marsh & McLennan Companies, Inc. (MMC) has received a response from 70,000 policyholders eligible to participate in the compensation fund MMC established as part of its settlement with the New York Attorney General and Superintendent of Insurance in January 2005.
The settlement concluded a civil suit launched in 2004 by New York state Attorney General Eliot Spitzer. The civil suit included allegations that Marsh had engaged in fraud and anti-competitive business practices.
Marsh settled the matter with the attorney general and faces no criminal sanctions. Earlier this month, Spitzer announced the indictment of eight former Marsh employees.
As part of its 2004 settlement with Spitzer, Marsh agreed to replace the top management in the company, apologize for “unlawful” and “shameful” business practices, implement reforms designed to improve transparency and service for insurance customers, and establish an $850-million restitution fund for policyholders.
Marsh says 70,000 policyholders will receive approximately $750 million of the $850 million settlement. Over 90% of the largest policyholders have opted in to the settlement.
Policyholders electing to participate in the Fund had until September 20, 2005 to sign a release.
Michael G. Cherkasky, president and chief executive officer of MMC, said: “We are gratified that so many clients have elected to participate in the Fund. This broad endorsement by our policyholder clients follows on the heels of the settlement agreement reached with numerous state insurance commissioners through the National Association of Insurance Commissioners. Completion of this stage of the process represents another important step forward for Marsh.”
Payments will be made in four installments on November 1, 2005 and June 30, 2006, 2007, and 2008.
MMC is a global professional services firm with annual revenues exceeding $12 billion.