Marsh to Pay $4.75 Million to Settle Ohio Antitrust Case

Without admitting any wrongdoing, insurance broker Marsh & McLennan Cos. will pay $4.75 million to resolve an antitrust lawsuit in Ohio, according to Ohio Attorney General Richard Cordray.

The lawsuit, which was filed in Cuyahoga County Common Pleas Court, accused Marsh and a number of insurers of rigging bids. From 2001 to 2004 the insurers and Marsh allegedly conspired to provide customers with fictitious quotes that created a false impression that competitive bidding had produced the best possible price, the complaint said.

"We are pleased to have resolved this matter, which relates to events dating back to 2004 and earlier," Marsh said in a statement. "The settlement makes no findings against Marsh, includes no fines or penalties, and expressly does not include any admission of liability by the company."

The attorney general has also reached settlements with Hartford Financial Services Group ($100,000); Zurich ($7 million); St. Paul/Travelers ($6.6 million) and Employers Re ($550,000), said Kim Kowalski, a spokeswoman for the Ohio Attorney General's office.

Outstanding are allegations against Ace American Insurance Co. and the Chubb Corp. Cuyahoga County Common Pleas Judge John J. Russo is presiding in the case.

The settlement money will be shared among dozens of public entities throughout the state, including universities, schools, cities and counties.

"This settlement regains a piece of what we lost as a result of secret conspiracies that ultimately cost Ohioans millions in premium payments by schools, universities, cities, counties and others," Cordray said in a statement.

Additional funds from this settlement will be distributed to the state's Antitrust Revolving Fund for antitrust enforcement, the Ohio attorney general for litigation costs and the Ohio Department of Insurance for investigative costs.

Including the settlement, the Ohio attorney general's office has recovered more than $27 million as a result of the entire antitrust lawsuit against Marsh and various insurers. In April, the attorney general's office reached a $9 million settlement with American International Group in the matter (BestWire, April 7, 2010).

In a separate case, AIG said it agreed to pay $725 million to settle an ongoing legal dispute with Ohio public pension funds, which accused the insurance giant in 2004 of anti-competitive activity, accounting violations and manipulating stock price (BestWire, July 19, 2010). This deal represents one of the largest securities class-action lawsuit payouts in U.S. history.

Shares of Marsh & McLennan Cos. (NYSE: MMC) were trading at $24.22 on the afternoon of Sept. 28, up 0.25% from the previous close.

With $10.5 billion in annual revenue for 2009, Marsh & McLennan Cos. was the largest global broker as ranked by Best's Review magazine (Best's Review, July 2010).

(By Meg Green, senior associate editor, BestWeek: [email protected])