INSURANCE SCANDAL TOUCHES S.C.:

The unfolding scandal has claimed one victim in South Carolina, and there could be others, according to two area newspapers. The Spitzer civil suit against Marsh & McLennan, prominently mentioned the Greenville school system. Though only the school district was cited, the Port of Charleston and presumably other big companies in the state do business with Marsh. Repeated references to the Greenville school system in the 31-page court document filed in New York Oct. 14 allege that Marsh rigged the bidding process to tilt business toward a favored client. As a broker, Marsh was supposed to shop around and select the companies with the best rates to insure the school district’s $968 million building and renovation project. Instead, Marsh is accused of submitting a sham bid that was artificially high to give the appearance of competition. The court papers also say it tried to squeeze a “contingent commission” agreement out of an insurance company in exchange for steering business its way. According to various news sources, such shadowy commission deals have been under investigation for a while, but this case sheds some light on how the line of legitimacy has been crossed. It’s unclear whether the school system was financially harmed, but there is potential that it paid too much for its insurance. The Port of Charleston, meanwhile, has been buying its property and casualty insurance through Marsh for the past five years, but officials think they have been getting a fair shake.