Spitzer Accuses Insurers of Bribing Brokers

Agents for insurance brokers accepted vacation trips, cheap loans and shares of stock or stock options from insurers in exchange for steering clients their way, New York Attorney General Eliot Spitzer said yesterday. Spitzer and others at a congressional hearing called for more federal oversight to ensure brokers' against guide clients to the best and most affordable policies for their needs, not those that provide payoffs for the broker.

In New York, two more insurance executives pleaded guilty to misdemeanors for their roles in insurance bid-rigging schemes.

Spitzer told lawmakers that inducements for brokers' agents were "structured in many different ways, including loans and offers of stock… they are not necessarily improper in and of themselves on their face, unless they are not disclosed and they distort behavior." The New York attorney general - who previously exposed misconduct in the mutual fund and Wall Street analyst business - last month, filed a lawsuit against Marsh & McLennan Cos Inc, the world's largest insurance broker. In that action, as in another filed last week against Universal Life Resources, Spitzer has accused told the Senate Subcommittee on Financial management looking into allegations of steering, bid-rigging and other possible abuses in the insurance industry.

In New York, two former employees at insurer Zurich American - a unit of Switzerland's Zurich Financial - pleaded guilty yesterday to misdemeanors related to Spitzer's investigation. The two, Edward Coughlin and John Keenan, had been facing felony charges, but agreed to cooperate with Spitzer's ongoing investigation. Zurich said the two Had been suspended but have now left the company - Reuters