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DALLAS, TX, Oct. 27, 2004 (Kevin DeVaan, JD, CPCU, CLU) –- Perhaps like you, I've been fascinated by the press coverage our industry has received lately – probably more individual stories in prominent papers than at any other point in the last 25 years. All thanks to the lawsuit N.Y. Attorney General Spitzer filed against Marsh & McLennan on October 14.
I wondered what was really behind it all, and perhaps more importantly what it might mean to other brokers, agencies, carriers and especially our customers. Here's what I know: there are very good, well meaning people in this business who have integrity, who are honest, and who work hard for the good of insured customers every day – unfortunately, theirs are not the stories being told these days. Instead, we're being painted with a broad brush of fraud and collusion. Investors have banged the industry incredibly hard these last few days, wringing perhaps 10% of the collective market values out of our industry. The impact is obvious – the harder questions are why this has happened, and what the implications might be over the long term.
Having practiced insurance regulatory law for a large part of my career, it was natural to set aside the press analysis and get to the source. So, I obtained and have studied Spitzer's actual Summons & Complaint (the actual allegations and suggested evidence that sets up the lawsuit). It is 31 pages in length, and contains 60 factual allegations (instances which, if proven, illustrate violations of several New York laws – notably Fraudulent Business Practices – Executive Law section 63(12), Antitrust violations, General Business Law section 40 et seq, Securities Fraud, General Business Law section 352-c, and Unjust Enrichment, a general Common Law fraud).
The factual allegations are stunning ... More >>
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