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 | | From: | Edmund Fitzgerald | | Subject: | N.C. insurance regulators investigate alleged price-fixing | | Date: | Thu, 20 Jan 2005 07:14:13 -0500 |
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 | From:
http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20050119/APN/501191
068&cachetime=5
Last updated: January 19. 2005 5:28PM
N.C. insurance regulators investigate alleged price-fixing
The Associated Press
State insurance regulators are investigating whether up to 10 insurance
companies conspired in a price-fixing scheme.
The state Insurance Department is examining the companies after contacting
about 1,400 insurance providers and 4,000 licensed brokers in the fall. The
agency asked each to certify in writing that they had not engaged in bid
rigging or other illegal price fixing.
"Initial results of our investigation show there is enough evidence of the
possibility of this problem to warrant further work," Insurance Commissioner
Jim Long said. "All we have so far are preliminary details, a few leads that
need to be looked into."
The department started its probe into price fixing in late October in the
aftermath of allegations by New York Attorney General Eliot Spitzer that
Marsh & McLennan, accepted commissions for illegally fixing prices to favor
certain insurance providers.
Under the scheme, an insurance broker fakes or manipulates insurance bids to
steer a client to a particular company, regardless of whether it offers the
best price. In exchange, the insurance company gives the broker a kickback,
or a "contingent commission."
Long did not reveal the names of the companies being investigated, but may
do so by the end of the week if given the legal OK. A department spokeswoman
didn't immediately return a phone call late Wednesday.
"If we do find evidence of bid-rigging, we will take swift steps to make
sure the practice ceases to take place in this state, and we will
appropriately punish those guilty to our ability under the law," Long said.
Long's department also is crafting a legislative proposal to more clearly
define the fiduciary responsibilities insurance brokers have to their
clients.
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Information from: The News & Observer,
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