US insurance scandal set to be focus of Senate inquiry [View All]

The Independent
By Katherine Griffiths in New York
Published : 06 November 2004

The US Senate is about to open an investigation into allegations that some of America's largest insurers and brokers have taken part in schemes to rig insurance bids and to gain inappropriate fees from customers.

There will be a hearing on Capitol Hill within the next few weeks at which the behaviour of Marsh & McLennan and Aon, the two biggest brokers in the US, is put in the spotlight.

The inquiry will be led by the Republican Senator from Illinois, Peter Fitzgerald, who is chairman of the government sub- committee on financial management. Mr Fitzgerald, who has a reputation for pursuing America's financial companies over various misdemeanours, also led an investigation into the mutual fund sector earlier this year which resulted in companies agreeing to lower their charges for ordinary investors.

The Senate inquiry will add to the pressure on the insurers and brokers, after Eliot Spitzer, New York's attorney general, launched a lawsuit last month against Marsh. Mr Spitzer also named a number of insurers in his case, including Ace and American International Group. He may widen his lawsuit further and is looking closely at the business practices of Aon.

http://news.independent.co.uk/business/news/story.jsp?story=580032

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