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February 20, 2009 Friday 04:25 PM EST

361 words


Judge Approves $88 Million Settlement of 2005 Bid-Rigging Suit Against Marsh

Alyn Ackermann

NEWARK, N.J.

A federal judge has approved an $88 million settlement between Marsh & McLennan Cos. and a group of plaintiffs in a lawsuit stemming from bid-rigging investigations in 2004 and 2005.

The settlement approved by Judge Garrett E. Brown Jr. of the U.S. District Court for New Jersey in Newark, provides $69 million in payments to the plaintiffs, including $7 million in administrative costs, and $19 million in legal fees, according to court documents.

"The settlement resolves all federal class-action claims by policyholders against Marsh arising from the events of the fall of 2004," Marsh Inc., MMC's brokerage unit, said in a statement. "Marsh is pleased to bring an end to this litigation. We are moving forward with our business and are focused on the future."

MMC (NYSE: MMC) was one of a number of insurance brokers and carriers who were accused by the plaintiffs, who are all policyholders and clients of the defendants, of racketeering and other charges for allegedly engaging in a broad conspiracy to rig bids for commercial insurance contracts.

The case dates to 2005, and consolidates lawsuits originally filed around the United States. In 2007, Brown dismissed the federal racketeering charges in the case, rejecting the conspiracy theory of the suit, and in 2008 dismissed claims that defendants violated the Employee Retirement Income Security Act and various state-level charges (BestWire, Jan. 18, 2008).

The plaintiffs are appealing those rulings. The settlement removes MMC from that legal process.

MMC settled the New York regulatory investigations in January 2005, establishing an $850 million fund to compensate clients. The broker has continued to settle regulatory cases brought by various states following the original investigation, most recently reaching a $7 million settlement with nine states (BestWire, Jan. 7, 2009).

MMC is the second-largest broker in the world based on 2007 brokerage revenue, according to the Best's Review ranking of global brokers.

Shares of Marsh & McLennan Cos. were $18.79 in afternoon trading on Feb. 20, down 3% from the previous close.

(By Alyn Ackermann, senior associate editor, BestWeek: Alyn.Ackermann@ambest.com)

February 21, 2009

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