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Last Updated: Monday, 25 October, 2004, 07:02 GMT 08:02 UK
US insurance investigation widens
Eliot Spitzer
Eliot Spitzer's investigation has sent shock waves through the industry
Investigators probing US insurance firms are alleged to have found evidence of improper practices at Aon, the world's second largest broker.

According to the New York Times, investigators working for Eliot Spitzer have found evidence of deceptive and coercive practices at the firm.

The paper claimed the New York Attorney General's office could bring a civil lawsuit against Aon within weeks.

Mr Spitzer is already suing Marsh & McLennan, the world's top broker.

Shock waves

Nobody from Aon was available for comment on the allegations, the New York Times said.

Mr Spitzer launched the suit against Marsh earlier this month claiming it had received illegal payments for steering clients to favoured insurers.

His investigation has sent shock waves through the insurance industry, leading to sharp falls in insurers' share prices.

The New York Times claimed Mr Spitzer's office had uncovered documents showing that brokers at Aon have steered business to insurers which paid incentives to the company.

The paper said that while no evidence of bid rigging or price fixing had been found, investigators believed that the broker's business practices represented a violation of anti-trust laws.

Trust issue

On Friday Aon said it would stop taking 'contingent' commissions from insurance companies and commissions from clients.

"Because trust and client satisfaction are top priorities for all of us at Aon, we are discontinuing a practice that has created enormous controversy and confusion," Aon chairman Patrick Ryan said in a statement.

The New York Times also said investigators are expected to file lawsuits shortly against several smaller national insurance brokers.


SEE ALSO:
California joins insurance probe
21 Oct 04  |  Business
US insurers hit by probe threat
20 Oct 04  |  Business
Corruption probe hits US insurers
15 Oct 04  |  Business


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