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The factual allegations are stunning: summing them together, it would appear the New York Attorney General has proof that Marsh (a) held itself out as a trusted advisor to its fee paying corporate customers while at the same time insisting some of those customers' policies be placed with favored carriers that provided Marsh with revenue enhancing "Services Agreements" and (b) systematically cajoled carriers into rigging high bids that created an artifice of actual competition when there was none.
Most lawsuit initiating Summons and Complaints are somewhat vague – setting up the discovery process and allowing each side to gather facts in discovery that prove up or defend the allegations. Not this one – it cites internal and external emails, notes from executive meetings and minutes from carrier meetings that leave one with no doubt that these things actually did happen. I can always find a way to fashion a defense. Try as I might, I can't fashion any kind of legitimate defense construct for what Marsh appears to have done – and what the carriers did to support this process.
In the mid-80's I recall drafting a new agency agreement form for a property and casualty insurer I worked with. Even then the relationship between the agent and the customer, vs. the agent and the company – and the duty of care that followed was murky at best. In the vein of independent agencies and brokerages, it is often unclear whether the agent/broker is representing the interests of the insured exclusively, the carrier exclusively, or both, depending on the issue. This is an area of confusion that has allowed the kind of exploitation that Marsh seems to have undertaken. The Spitzer suit doesn't help. In it, brokerage fees and agent commissions are lumped together and classified as payments made by insureds to purchase independent advisory services. As a result, the Spitzer suit has broad implications for the industry as a whole.
It would be easy – and it is too easy – to distinguish ourselves from the Marsh practices ...
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