Eliot Spitzer is . . .

By | November 22, 2004

Googlism.com strikes again, this time on the subject of the man who’s turning the insurance industry upside down. Googlism tells you what the Google search engine says about anybody or anything. The Web site tells us that New York Attorney General Eliot Spitzer is …

… lawless … no stranger to controversy … leading the charge … intent on avoiding this pitfall … a hero … a ratfink … full of baloney … tooting his horn as the little investor’s last best hope … the attorney general and he has to do what he feels is appropriate … like wrestling with a grizzly bear … no Eliot Ness … no stranger to a camera … steamrolling toward … a Democrat who is thinking about running for governor in 2006 … not the first New York state attorney general to build a political career out of bashing Wall Street … conducting the first major investigation … trying to get ahead of the curve this time.

In spite of all the hubbub surrounding Spitzer’s crusade against bid-rigging (which is legitimate and necessary) and contingent commissions (which is a huge overreach on his part), East Managing Editor Andy Simpson reports that agency buyers are still hungry for growth (page N6).

Whether this M&A activity will continue in light of the Marsh Inc. fallout remains to be seen. Chicago-based Aon, the world’s second-largest broker, has reportedly lined up as $890 million in lines of credit in preparation for what seems to be a likely suit against the firm by Spitzer, rumored to be a candidate for New York governor in 2006.

Linda Garner examines whether the brokerage industry will continue to consolidate in the wake of the golden goose of contingent commissions having been taken off the revenue table. She writes that buyers will be more cautious (page N2).

With all the hubbub over contingent commissions, including hearings as of this writing in the Senate, it might be easy to overlook the election results. Online Editor Dave Thomas writes that insurers donations paid off big with key victories at both the national and state levels (page N1). In the Midwest, several tort-reform friendly candidates won or were re-elected (page 6). The biggest blow for reform came in Illinois, where a Republican candidate won an open Supreme Court seat in a 37-county Downstate jurisdiction that includes the infamous judicial hellhole of Madison county.

Securing a favorable environment in the several states takes on new importance now that federalization–a door opened by insurers eager to escape some of the disadvantages of state-based regulation–may, as a consequence of Spitzer’s crusade, be turned into a vehicle for direct federal regulation and an insurance czar.

Oh, how the tide has turned.

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Insurance Journal West November 22, 2004
November 22, 2004
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