Judge Dismises Corruption Charges Against Marsh, Brokers, Insurers

October 2, 2007

  • October 2, 2007 at 3:50 am
    Tired of Double Standards says:
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    Legacy Broker – I disagree with your assessment of what took place. A few bad apples broke the law and were rightly identified and punished. The extent that Gov Spitzer and his gestapo went to extort many other companies and their representatives into “reaching an agreement” with his “investigators” by threatening them to settle or spend the next few years of their lives and millions of dollars in court and in the newspapers should be the subject of RICO proceedings.

    The “Sheriff of Wall Street” has bad apples in his own house – witness the ongoing scandal of falsifying information to obtain data from the NY State Police to try and get Joseph Bruno. And how did he deal with his own bad apples? To the best of my knowledge they are still working for him in their nice state offices…
    There is no argument that those that break the law should be sought out and punished – but to broad-brush an entire industry while doing that for their own benefit (press while setting up to run for Governor) is as wrong – just not illegal.

  • October 2, 2007 at 4:15 am
    Legacy Broker says:
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    As a smaller broker, I can tell you stories from underwriters and brokers that would differ from the side of the story being told here by former M&M and large broker employees. I personally lost my first account 30 years ago to M&M when they blocked my markets, and I have heard many stories of how arrogant, threatening and abusive M&M execs could be when dealing with underwriters on behalf of their clients. While our firm rarely lost business to them head to head, they did not have a reputation for fair play. I have to admit that neither did they have a reputation for sleazy dealings that some smaller competitors had, but that does not excuse the abuses that Spitzer uncovered. I would like to hear the perspective of a risk manager, which would likely differ from that of the brokers voiceing their opinions here.

  • October 2, 2007 at 4:48 am
    Anon says:
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    Spitzer’s expectation of the Marsh marketing process was it to be a sealed bid environment. Price fixing is not what is being debated downtown right now because there was no price fixing going on at Marsh. Also, the people that plead guilty did so out of fear after the intense threats from the Spitzer goon squad who are now gooning it up in Albany in what we all got to see in the “Dirty Tricks” scandal. May the Lord spare you having to encounter such an evil and arrogant person like Eliot Spitzer. And don’t be so niave and believe that Spitzer was fair when what he did was take snippets from Marsh e-mails as opposed to showing the full, fair and honest facts Just like he was trying to do with Joe Bruno, but this time he got caught because those in the know now know what to expect from this low life of a human being.

  • October 2, 2007 at 6:08 am
    tom says:
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    Legacy I understand where you are coming from and the personal disdain you have for Marsh. Personally I don’t think their practices will change.
    Should they have been exposed for what the agent did? Absolutely. We don’t need that kind of garbage in our industry.
    Having said that I have a problem with the way Spitzer went about his prosecution including considering Contingent Commissions racketeering. We can point fingers to other industries compensation; auto or real estate sales or even attorney’s.
    We have never received a contingency commission, to label it under the guise of racketeering or to create an impression it is illegal to receive this type of compensation is irresponsible and irrational.
    Your gripe is with Marsh I can see why, mine is with Spitzer and how he twisted our industry practices and equated them with say the mafia. I find him very troubling and it certainly opened the door to the trial bar to walk in and call all Independent Agents character and profession in question. Just look how many and how quickly law suits popped up around the country. I believe overall Independent Agents do a very good job for their clients and we do things legally and above board.

  • October 3, 2007 at 9:31 am
    tom says:
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    Legacy I appreciate your comments. I guess Florida is different since we cannot charge a fee and collect a commission, so I am a little naive to those type of billing practices. Know that I have no problem with collecting “just” a commission. Believe it or not I don’t care what the commission is since my concern is doing a service for the client. It has been my way of doing business for over 25 years. Earnings takes care of itself when you do the client right. Yes I am making this personal since this issue affects me personally. When we do a service for a client, it is no mystery we are going to get compensated and if the client wants to know how much, we tell them. When false allegations are made against us agents for doing a service, use manual rates, use NCCI filed work comp rates and hide nothing and don’t receive a contingency bonus but still have to defend our practice, it angers me. Spitzer may have been right to proceed against the Marsh agent for fixing quotes with AIG, but those actions are not indicitive of how we all do business.
    When I am put into a category of that Marsh agent for selling a $3,000 yr state filed rate BOP and a $2,000 yr NCCI rate filed work comp and a $6,000 yr cauto (saving the client $2,000 from his previous company) I am angry. When allegations of steering are levied against you and you did your best and the client ultimately makes the decision to buy the insurance, how is that my fault?
    Finally, when the client cancels those policies for non-payment, then goes to Nationwide Insurance, how is it that a Nationwide agent is not guilty of “steering” when the only company they can offer is Nationwide? Oh that’s right we are independent agents.
    The system is out of whack, greed has taken over and we the agents are placed right in the middle. I guess that’s the casualty of a free market.
    I appreciate for allowing me to vent, this has been quite theraputic.

  • October 3, 2007 at 9:52 am
    Legacy Broker says:
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    Tom, I do feel for your plight regarding service fees…that is exactly why I believe a merit-based system should replace the current commission system. Some states (e.g. Montana) do not even allow brokers or companies to charge an inspection fee, let alone a service fee or policy fee. The commission and fee system is highly variable across the U.S. The NAIC tried to create a workable model (but many entrenched in the industry have resisted change.) The answer is NOT national regulation, which would stifle competition and result in unhealthy consolidation in all segments of the industry.

    No allegations involved commoditized BOP policies, etc. That Nationwide agent is clearly an agent of the insurance carrier. If we are truly representing the policyholder, we must relinquish both standard and contingent commissions paid by the insurers to avoid a conflict of interest.



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