Investigators have been assigned by Commissioner Jim Long of the North Carolina Department of Insurance Commissioner to take a closer look at possible bid-rigging by insurance companies and brokers. Last October the department contacted more than 6,000 insurance agencies and brokers, requiring them to complete and return a DoI survey and certify that they had not engaged in bid rigging or illegal price fixing.
“Initial results of our investigation show there is enough evidence of the possibility of this problem to warrant further work,” Insurance Commissioner Jim Long told the Wilmington Morning Star. “All we have so far are preliminary details and a few leads that need to be looked into.”
A DoI spokesperson confirmed that active an active investigation is now taking place of as many as 10 insurance companies suspected to have conspired in price-fixing.
North Carolina regulators sent surveys out last October to more than 6,000 insurance companies, brokerage firms and individual brokers. They asked whether if recipients had engaged in bid-rigging. If the answer was yes, the DoI demanded details.
Efforts by Long were to reveal: 1) persons who have solicited, sold or negotiated insurance; 2) persons who have participated in bid rigging; 3) copies of the bids, quotes , applications and policies relating to such bid rigging; and 4) all information regarding how the respondent became aware of this information.
Long’s request required companies receiving the “demand to produce information,” to respond and provide information about bid rigging, participation in any questionable arrangement and defines bid rigging. It requires the recipient to list, state and identify in detail any and all information relating to any bid rigging to which the recipient is aware and if such instances, to provide information about the instance. Anyone receiving the survey that is not aware of bid rigging is required to return a signed, notarized form from the president or CEO of the company.
The North Carolina investigation asked only about bid-rigging because regulators said they felt bid-rigging was the most egregious allegation. The hope was that if there is any wrongdoing in this state, conscientious brokers or insurance company employees would use the surveys as a way to blow the whistle, Chrissy Pearson, an insurance department spokesperson said.
“If we find evidence of bid-rigging, we will take swift steps to make sure the practice ceases to take place in this state, and we will appropriately punish those guilty to our ability under the law,” Long said last October when the investigations began.
Steward Johnson, the department’s general counsel told the Observer that “Records of criminal investigation and records of criminal intelligence information are not public records.”
Topics Agencies North Carolina
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