Minn. AG Outlines Legislation on Broker Operations

Minnesota Attorney General Mike Hatch outlined several proposals designed to head off the abuses alleged by New York Attorney General Eliot spitzer in his suits against Marsh and Universal Life Resources.

Hatch said he’s met with several dozen representatives of the insurance industry regarding allegations of price manipulation. Although none would go public and he doesn’t have any proof, Hatch said their suggestions helped him put together the pair of proposals lawmakers said they’ll introduce in the upcoming legislative session.

The first of Hatch’s proposals would require the broker to disclose the names of all of the companies contacted for quotes and what those quotes were. It also would write into state law that an insurance broker/agent must serve the interests of their customers—not just the insurance companies that pay them.

The second would require insurance companies to provide quotes to multiple brokers on the same company if requested. Now, insurance companies sometimes decline to provide a quote to a second broker, saying the first one had done the work. Hatch said the proposals may help keep insurance rates lower for businesses.

Mark Kulda of the Insurance Federation of Minnesota said his organization had no problem with disclosure. He was concerned, however, with the proposal to require insurance companies to provide quotes for the same company to multiple brokers.

“It makes it more expensive to give the same bid out over and over,” Kulda said.

A better solution, he said, would be for the businesses to simply contact multiple brokers who deal with different insurance companies.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.