Marsh & McLennan Cos. Inc. is abandoning its practice of accepting contingency fees from insurance companies in light of recent allegations by New York Attorney General Eliot Spitzer.
The New York insurance broker said Tuesday that it would stop accepting the fees by Jan. 1. It also said it has created a compliance division to oversee its staff.
The announcement followed Monday's news that Jeffrey W. Greenberg had resigned as Marsh & McLennan's chairman and chief executive officer. The resignation was one of a series of actions meant to help the company resolve its legal and regulatory issues.
Marsh & McLennan announced Monday that Michael G. Cherkasky has been named its president and CEO and has been elected to the board of directors. Mr. Cherkasky will also remain the chairman and CEO of the company's risk and insurance services subsidiary, Marsh Inc.
Mr. Greenberg came under fire this month when Mr. Spitzer filed a lawsuit that accused Marsh & McLennan of colluding with insurers, including American International Group, to fix prices.
AIG's chairman and CEO is Maurice R. Greenberg, Jeffrey Greenberg's father. Jeffrey Greenberg spent much of his career at AIG before joining Marsh & McLennan in 1999.
