Liberty Mutual vs Spitzer

Most of the insurers named in the Marsh bid-rigging allegations have reached settlement terms with New York attorney general Eliot Spitzer. The insurers hoped that by paying restitution and promising to eliminate any tainted practices question marks over their reputations will subside. One insurer, however, has bucked the trend and says it will fight the bid-rigging allegations in court after settlement talks collapsed. IR&A looks at Liberty Mutual’s case, as the first of its kind against the regulator who has promised to “clean up the insurance industry”.

The contingent commission investigation in the US, which first began in the autumn of 2004, is continuing to cast a dark cloud over the reputation of the US property/casualty insurance market. US attorney general Eliot Spitzer’s inquiry initially implicated insurance brokers but further probes revealed that he may have cases against the insurance companies that collaborated with brokers to both provide false quotes and request that brokers find quotes less competitive than their own in return for additional business or bonus payments.