All material subject to strictly enforced copyright laws. © 2021 Insurance Insider is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Marsh moves to collect $230mn in contingent commissions

Despite being characterised by Eliot Spitzer as a practice that “rigs bids, stifles competition and cheats customers,” Marsh confirmed last week that it is moving to collect up to $230mn in contingent commissions which it says it is owed by insurers.

The broker said it would place the funds in a segregated account to be used for any restitution agreement it reaches with Spitzer. Last week, Spitzer confirmed that to settle his civil lawsuit against the broker he is looking for the disgorgement of commissions back to Marsh’s clients – as revealed in the October 2004 edition of The Insurance Insider. The outstanding amounts are those owed by insurers before 15 October – the day Marsh confirmed it was suspending the practice.

However, Spitzer’s office denied reports that he has settled on a sum of $500mn, a figure reported in the Wall Street Journal. “I didn't put that (number) out. I have absolutely no idea where it came from, and it has absolutely nothing to do with reality," Spitzer told Reuters. "We're not talking about numbers. I don't know where it came from." Marsh has said it has collected about $1.2bn in such fees since January 2003.

As noted above, the broker has said it will permanently drop contingent commissions – which it calls “market services agreements” – next year and has also revealed that it will fully disclose all commissions and fee arrangements. MMC’s new chief executive Michael Cherkasky has said its main priority is to settle the charges with his former District Office colleague Spitzer.

Tomorrow (9 November), MMC will publish its third quarter earnings and is likely to give an update on its discussions with the New York attorney general.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree