MONTANA COMPANIES TO RECEIVE MORE THAN HALF MILLION DOLLARS FROM LEGAL SETTLEMENT
Auditor Morrison Reminds Montanans That September 20 Is Deadline To Accept Proposed Settlement
Helena, Mont., September 19, 2005 - Montana State Auditor John Morrison announced today that Montana insurance policyholders will receive offers totaling approximately $540 thousand to settle their claims against Marsh & McLennan Companies Inc. for improper steering of insurance business.
"We won't tolerate deceitful corporate practices in Montana," Morrison said. "Some of Marsh's practices cost Montana's small businesses a lot of money. This settlement will go a long way toward making them whole and sends a message that dishonest brokerage practices will not be tolerated in the future. I am pleased that the end result of Marsh's improper activities is that Montana businesses will be offered over one-half million dollars collectively."
The settlement offers were sent to more than 195 Montana companies, representing some of the largest employers in the state. The companies, all current and former clients of Marsh, have until tomorrow to accept the proposed settlement. Marsh will only honor releases postmarked by September 20, 2005. In many cases, multiple settlement agreements were sent to companies. All agreements must be signed and returned to the address on their form to receive the full settlement amount.
Earlier this year, the New York State Insurance Department and the New York Attorney General negotiated a deal where Marsh agreed to return $850 million in restitution to companies holding policies nationwide. The New York regulators asserted that Marsh insurance brokers improperly directed clients to insurers with whom they had agreements to receive lucrative payoffs if certain business goals were achieved, even if it was not the best deal for the consumer. The most significant cases involved excess casualty insurers from whom Marsh brokers received contingent payments based upon their ability to meet certain pre-established placement volume goals. The Montana State Auditor's Office regulates Marsh subsidiaries that do insurance business in Montana.
As a member of a special task force of the National Association of Insurance Commissioners (NAIC), Morrison met with New York Attorney General Elliott Spitzer early on in the process. The NAIC moved quickly as a unified force of state regulators to address this issue and coordinate the efforts of the New York regulators.
People with questions are urged to contact the State Auditor's Office at 800-332-6148 or 444-2040.