New York Attorney General Eliot Spitzer, leading a broad probe into insurance industry fraud and price-fixing, said Friday he intends to pursue criminal charges against executives as high as possible up the corporate ladder.
Spitzer in an October lawsuit accused Marsh & McLennan & Cos., the world’s largest insurance broker, of rigging bids for insurance business and fixing prices. Since then, six mid-level insurance executives have faced criminal charges arising from Spitzer’s nine-month old probe.
Following testimony at a New York State Assembly insurance committee hearing Friday, Spitzer told reporters his probe would ultimately land even bigger fish.
“We are moving forward very aggressively with criminal cases against individuals and will pursue those as far up within the structure of these companies as we possibly can,” he said.
Spitzer says brokers and consultants have corrupted insurance markets by collecting so-called placement fees, steering business to those insurance carriers paying the most. Such schemes restrict competition and result in higher premiums for consumers, Spitzer said.
On Thursday Marsh Inc. Senior Vice President Robert Stearns pleaded guilty to criminal fraud charges. Previously five other individuals from American International Group (AIG.N: Quote, Profile, Research) , Zurich American Insurance Co. (ZURN.VX: Quote, Profile, Research) and ACE Ltd. (ACE.N: Quote, Profile, Research) pleaded guilty to similar charges.
All six, Spitzer said, are cooperating with investigators as the probe’s reach continues to stretch.
“These criminal cases will permit us to make criminal cases and bring criminal actions against more senior executives within the companies,” Spitzer said.
Spitzer’s comments would seem to dispel any speculation he will back down from his investigative efforts. Spitzer, who recently announced he would seek election as governor of New York next year, insisted his office’s insurance and other investigations would continue unabated.