An insurance division of General Electric Co. has admitted giving the giant brokerage company Marsh & McLennan inflated quotes — the latest company to become embroiled in a bid-rigging scandal rocking the insurance business.
Employers Reinsurance in Kansas City, Mo., a unit of GE Insurance Solutions, said that it gave Marsh inflated quotes on fewer than 10 occasions when bidding for premiums of less than $1 million, according to a report Wednesday by CBS MarketWatch.
The bids were submitted at the request of Marsh by one former and one current employee, Employers Re said in a statement on its Web site. The former employee left three years ago, and the other person has been suspended, GE spokesman Dean Davison said.
Employers Re, which discovered the actions during a five-week internal investigation, said it told New York Attorney General Eliot Spitzer about the bids in mid-November.
Mr. Spitzer sued Marsh Oct. 14, alleging that it had rigged bids and accepted fees called contingent commissions in return for steering business to favored insurers. The suit implicated huge insurers like American International Group, Ace, and Hartford Financial, and it has prompted guilty pleas by five executives to criminal charges.
Employers Re is the first company not already mentioned in Mr. Spitzer's lawsuit to publicly admit involvement in bid rigging. "We have taken the initiative to start an investigation," said Mr. Davison. "All the investigative work so far suggests the issues are isolated and confined to our excess workers' compensation unit."
That unit sells policies to companies looking for extra coverage as protection against major workplace accidents, Mr. Davison said.
In addition to contacting Mr. Spitzer, GE informed the Missouri Department of Insurance, Employers Re's main regulator, the spokesman said. The company wrote $9.7 billion of premiums last year.
