Spitzer says Marsh could face penalty 'far higher' than $500m

October 29, 2004|Associated Press

NEW YORK -- The price for settling state charges of collusion and bid-rigging by the nation's largest insurance broker could be ''far higher" than $500 million, New York Attorney General Eliot Spitzer said yesterday.

Spitzer disputed the $500 million settlement figure reported by The Wall Street Journal as the minimum for any settlement of the attorney general's lawsuit against Marsh & McLennan Cos.

Since Spitzer unveiled the suit Oct. 14, the company's chief executive resigned and outside directors have scrambled to settle the case as its stock plummets.

''The number I saw in the paper is not one that I have heard," Spitzer said after speaking to the Federal Law Enforcement Foundation in Manhattan. ''There has been no discussion about a number. It is very premature."

A Marsh spokesman didn't respond to a request for comment.

''We will do the calculation and it could be far higher than the $500 million," Spitzer said.

Shares of Marsh & McLennan rose 2 cents to $28.71 in trading yesterday afternoon on the New York Stock Exchange.

Separately, Allstate Corp., the second-largest US home and auto insurer, yesterday said it received a subpoena from the Connecticut state attorney general's office seeking information on alleged bid-rigging in the industry.

Allstate said Connecticut Attorney General Richard Blumenthal is seeking information about how it prices insurance products as part of a wider investigation that has already seen some 34 other insurers receive similar requests.

Also yesterday, Fitch Ratings downgraded Marsh & McLennan debt to BBB from A-minus and kept the company on its ''rating watch negative" list for possible further downgrades.