Spitzer: $750 Million, Apology Will Settle Marsh Lawsuit

January 15, 2005

New York Attorney General Eliot Spitzer is seeking a $750 million settlement from insurance broker Marsh & McLennan Companies Inc. to settle his bid-rigging and price-fixing charges, according to a report published Friday.

The Wall Street Journal said Marsh & McLennan has offered to pay $600 million, but Spitzer's office is seeking $150 million more than that "and a public statement of contrition."

The paper did not identify its sources but said they were "people privy to the talks."

Much of Spitzer's case has revolved around "contingent commission" fees that insurance companies paid in exchange for more business from Marsh & McLennan. Marsh & McLennan earned $1.2 billion in these fees in the 18 months ended last June.

After the lawsuit was filed, Marsh & McLennan eliminated the commissions, replaced most of its senior management, and adopted new operating guidelines.