Insurance brokers Marsh and Willis are complying with the terms of their 2005 bid-steering settlements reached with the New York Insurance Department, according to an auditor’s report released by the state.
“To their credit, both companies have cooperated fully with the department and are living up to the terms of the settlements,” said Deputy Insurance Superintendent Kermitt Brooks.
“They have extensively revised their compensation practices so clients can be confident transactions are transparent and conflicts of interest are avoided.”
The settlement resolved allegations the companies engaged in a pattern of steering business to favored insurers and soliciting bogus bids from others in an effort to guarantee the placement of business.
Under the settlement’s terms, the two agreed to offer restitution to policyholders and change the way they do business in an effort to avoid conflicts of interest.
Similar settlements reached in other states are patterned after the New York agreement.
RSM McGladrey conducted the audit, which found nearly all of the restitution had been paid — $850 million for Marsh and $50 million for Willis.
The auditors also found that the two large insurance brokers have generally complied with the brokerage compensation disclosure and other disclosure requirements contained in the settlement.
Topics New York
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