November 8, 2004
Florida Attorney General Charlie Crist has issued subpoenas to 10 insurance brokers and anticipates issuing additional subpoenas to at least 6 insurance companies this week.
The subpoenas seek documents and records pertaining to the business practices of these companies including questionable fee arrangements and possible bid-rigging. The investigation stems from a complaint from a Florida citizen approximately two weeks ago.
The Attorney General seeks to determine the current manner in which brokers and insurers utilize contingency commission arrangements. There are indications that insurance brokers have improperly steered business to insurers who pay the brokers the highest fees rather than seeking the best deals for their customers.
There are also indications that the companies may have engaged in bid-rigging, Crist's office said. The alleged practices could be in violation of Floridas antitrust laws, Chapter 542, Florida Statutes. Penalties allow fines of $1 million for corporate violations, $100,000 for individuals and for three times the amount lost due to illegal activities.
At this point we are investigating the brokers and insurance companies for possible violations of anti-competitive activities, said Crist. The subpoenas are part of a larger effort to ascertain whether insurance practices are being conducted lawfully, with no conflict, with insured citizens best interest at the forefront.
The Attorney General is investigating arrangements between insurers and brokers for commercial group accounts for property and casualty insurance as well as life and health policies. The Attorney Generals Office looks forward to working with the task force established yesterday by Floridas Chief Financial Officer.
Floridas Attorney General is among several state Attorneys General including New York, Massachusetts, California, Connecticut and Ohio that have opened investigations into insurance industry practices.
The 10 following insurance brokerage firms are receiving subpoenas:
- AON, Inc.,
- The Willis Group, Inc.,
- Brown & Brown, Inc.,
- Arthur J. Gallagher & Company,
- Acordia, Inc. doing business as Acordia Southeast, Inc.,
- Heath Lambert Group doing business as Heath Lambert Miami, LLC,
- Hilb Rogal & Hobbs of Vero Beach, Inc.,
- USI Holdings Corp. doing business as USI Insurance Services of Florida, Inc.,
- HUB Investment Corporation and
- Marsh & McLennan Companies.
