Fraud in Insurance Is Vast, Spitzer Tells a State Panel

[LiviaOlivia]

The New York Times
January 8, 2005
Fraud in Insurance Is Vast, Spitzer Tells a State Panel
By JOSEPH B. TREASTER

Eliot Spitzer, the New York attorney general, said yesterday that he had uncovered evidence of wrongdoing among insurance brokers and insurance companies on a far larger scale than he had anticipated when he began investigating the industry nearly a year ago.

"Many brokers, with the assistance and collusion of insurance companies, engage in systematic fraud and market manipulation," Mr. Spitzer said at a hearing of the Insurance Committee of the New York State Assembly in Lower Manhattan. "We did not anticipate the sheer magnitude of this practice."

In an interview, Mr. Spitzer said that since he sued the Marsh & McLennan Companies, the largest broker, on Oct. 14, he had been building cases against other brokers and insurers and was now "in discussion with several entities" aimed at settlements.

He declined to name any companies other than Marsh, which he accused in the lawsuit of rigging bids and improperly steering clients to high-paying insurers. An executive at Marsh and five executives at three insurance companies have been charged with fraud or antitrust violations.

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http://www.nytimes.com/2005/01/08/business/08insure.html