NU Online News Service, Oct. 19, 2004, 3:35 p.m. EDT
MetLife Inc. says that it’s not shocked that it was mentioned in recent charges against a leading brokerage accused of an insurance price-rigging scheme.[@@]
MetLife, New York, says in view of its dominant size and market position it is “not surprised” that it “has been included among the companies receiving investigative inquiries” from New York State Attorney General Eliot Spitzer about alleged price manipulation by the insurance broker Marsh McLennan.
“MetLife conducts business on a direct basis as well as through intermediaries, namely brokers and consultants, and pays both base commissions and other contingent payments,” the company says in a statement responding to the charges against Marsh.
“Contingent payments totaled approximately $25 million for business sold and serviced in 2003,” the company adds. “Additionally, 3rd parties also may be compensated for administrative services that they perform such as data processing, enrollment, billing and communication services.”
In a lawsuit, Spitzer charged that Marsh had quoted phony prices from insurance companies to a number of corporate clients in order to boost its profits.
MetLife says it told Spitzer on Oct. 1 it was not aware of any instance in which it provided a fictitious price quote to any broker. The company added, however, that it was continuing to investigate its own commission payment practices.