February 15, 2005 by Canadian Underwriter
One Marsh and two AIG executives offered guilty pleas today in New York Supreme Court in the ongoing investigation into insurance industry practices spurred by New York Attorney General Eliot Spitzer.
The guilty pleas stem from criminal charges of fraud and bid-rigging, with Spitzer’s office saying all three were involved in “a scheme that allowed Marsh… to protect incumbent insurance carriers when their business was up for renewal”.
A statement from the Attorney General’s office says the senior Marsh executive admitted to giving “a significantly understated figure” to clients when asked about the amount of revenue Marsh derived from “placecement service agreements” (i.e., contingent commissions), and that this practice was “official protocol”.
The defendants are all expected to testify in future cases, Spitzer’s office notes, along with six other insurance industry employees who have already offered guilty pleas to criminal charges stemming from the investigation. This includes one other Marsh executive, two others at AIG, two from Zurich and one from ACE.