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Administration April 1, 2006
Marsh Hit with Lagging Contingent-Commission Suit
January 4, 2006 (PLANSPONSOR.com) - Marshall &
Ilsley Corp. (M&I), a banking and financial services
company, filed suit against Marsh & McLennan Cos. Inc. in
federal court in Milwaukee last month on charges that the
broker secretly took kickbacks from insurers in the form of
contingent commissions while placing the bank's coverage,
Business Insurance reports.
Reported by Rebecca Moore
The bank is charging Marsh with breaches in fiduciary duty, also claiming it was unaware that Marsh collected interest income on M&I premiums held in fiduciary accounts before remitting them to underwriters.
Marsh previously settled bid-rigging charges for $850 million with clients who hired the company for insurance with inception dates from January 1, 2001 – December 31, 2004 (See MMC Settles ‘Shameful’ Bid-Rigging Case ). M&I hired Marsh in 1995, according to Business Insurance.
Clients had until Sept. 20, 2005, to seek compensation from the $850 million fund and waive their right to sue Marsh. Business Insurance said that about half of the 140,000 eligible clients opted to participate, including more than 90% of Marsh’s largest clients, the broker reported after the deadline passed.
The suit seeks restitution equaling the contingent commissions and interest income Marsh received on M&I’s business, along with punitive damages.
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