More than 15,000 Washington businesses, associations, individuals and other organizations reportedly qualify for nearly $14 million in restitution offered by the nation’s largest insurance brokerage firm to settle allegations of fraud and anti-competitive practices against the company.
Washington Insurance Commissioner Mike Kreidler said that Marsh & McLennan Companies Inc., recently sent letters to more than 15,000 of its Washington clients eligible to share in the national settlement. He said that each client will have to decide for itself if the settlement offer is sufficient compensation for damages.
“The Office of the Insurance Commissioner won’t offer case-by-case recommendations,” he said, “but our overall evaluation is that this is a fair settlement offer for Marsh’s Washington clients.”
The settlement covers a period from Jan. 1, 2001 through Dec. 31, 2004. Settlement offers range from more than $952,000 to amounts of less than $20. Clients who accept the settlement must sign a release forfeiting the right to pursue any claims against Marsh related to the fraud and anti-competitive practices. Clients who elect not to accept the settlement can pursue legal remedies.
The national settlement stems from an investigation and lawsuit in New York last fall, alleging that Marsh made improper payments, rigged bids and allowed other anti-competitive activities. Announcing the $850 million settlement in January, Marsh did not dispute the allegations. Earlier, the company discontinued the practice of receiving contingent compensation from insurance carriers.
In the aftermath of the Marsh investigation, Kreidler issued a strongly worded technical assistance advisory, reminding Washington’s licensed brokers and insurance companies of their duties and responsibilities to insured parties.
In addition, Kreidler’s office launched a separate inquiry targeting the top 10 brokerages in the state and the seven largest Washington-based insurance companies.
That investigation continues with findings expected later this summer.