Posted on 20 Feb 2009
This week a New Jersey federal judge approved a $69 million settlement Marsh & McLennan Cos. Inc. (MMC) reached with a class of policyholders last summer regarding industry practices that were exposed by former New York Attorney General Eliot Spitzer in his 2004 bid-rigging suit against the broker.
The class of property/casualty insurance policyholders sued MMC and several dozen insurers and brokers in consolidated litigation in New Jersey, alleging they engaged in a conspiracy to stifle competition by steering clients and rigging bids in violation of the Racketeer Influenced and Corrupt Organizations Act and the Sherman Antitrust Act.
In separate actions in 2007, U.S. District Court Judge Garrett Brown Jr. dismissed the claims, citing lack of factual evidence. The judge's dismissals "opened the door to a settlement" with the plaintiffs that "utilizes the funds left over from Marsh's prior settlement with the New York Attorney General and New York Insurance Department," said MMC attorney Mitchell J. Auslander of Willkie, Farr & Gallagher in New York.
As part of that settlement, MMC established an $850 million compensation fund. Roughly half of the 140,000 eligible policyholder clients accepted approximately $750 million from the fund.
In a statement, Marsh said it was pleased to bring an end to the litigation. "We are moving forward with our business and are focused on the future."