(by Peter Van Bruggen)

New York Attorney General Eliot Spitzer on Thursday filed a civil action against Marsh & McLennan, saying generally the overall industry was involved in bid rigging and steering the clients to other companies in return for illegal payments.

"This investigation is broad and deep and it is disappointing," Mr Spitzer said at a press conference.
Mr Spitzer claims the companies steered their clients to such companies as Ace, Chubb and American International Group in return for payoffs, which made prices go higher. He also added some companies fixed quotes, only giving the appearance of competition.

"The allegations are very serious," said Kenneth Pan, an analyst at FTN Midwest Research. "It’s tough to say where this will lead, but it seems it will spread throughout" the industry.

Marsh & McLennan face civil action for “corrupting” the insurance market through bid rigging and other fraudulent tactics.

"The losers in all of this, of course, are Marsh’s clients and the marketplace for insurance, which Marsh has corrupted by distorting and elevating the price of insurance for every policyholder," the suit says.

Along with Marsh & McLennan Cos., the suit also comprises four insurers, including American International Group.