Update 2: Spitzer Files Suit Against Calif. Company

11.12.2004, 03:53 PM

...

"What is particularly egregious in this case is that the cost of ULR's concealed payments were ultimately borne by individual employees, who were in no position to know about or contest these illegal practices," Spitzer said Friday.

The attorney general said his latest case is related to a civil suit he filed Oct. 14 against the nation's largest insurance brokerage, Marsh & McLennan Cos., alleging fraud and anti-competitive practices within the insurance industry. That action has resulted in the ouster of two top executives of Marsh & McLennan, including chairman and chief executive Jeffrey W. Greenberg; two top executives of Marsh Inc., the company's risk and insurance services unit; and criminal pleas of three insurance executives.

...

Spitzer's suit alleges that as much as two-thirds of ULR's annual revenues of about $25 million came from secret payments from insurers last year.

The complaint alleges that ULR received "override" payments from insurers for awarding them contracts to provide group coverage. The company collected about $11.5 million of its $25 million in revenues last year through such payments, Spitzer's lawyers estimated.

The company appeared to generate another $5.6 million last year through the collection of "communication fees" from insurers that were passed on directly to insurance consumers without their knowledge, the complaint said. The fees typically totaled $10 on each supplemental life insurance policy and $5 on supplemental disability policies, according to Spitzer.

....

Spitzer's suit names Metlife Inc., Prudential Financial Inc. and Unum Provident Corp. as among the companies writing policies brokered by ULR. Asked why the insurers weren't directly named in Friday's suit, Spitzer said, "all in due course."

"We are only in the early stages of this," he said. "We've been at it only for a number of months."

more
http://www.forbes.com/home/feeds/ap/2004/11/12/ap1652285.html

:bounce:

and the sale of the WTC as well as Sears Towers to his group

that would get my vote!