U.S.I. Gets Conn. Subpoena

U.S.I. Holdings Corp. has received a subpoena in theever-widening probe of contingency fee deals between brokers andinsurers.

The Briarcliff Manor, N.Y.-based brokerage said it has receiveda subpoena from Connecticut Attorney General Richard Blumenthal inthat states investigation of antitrust practices related tocontingency fees. The broker said it would cooperate fully with therequest for documents and information.

Mr. Blumenthal has issued 35 subpoenas in his investigation,which is mirroring New York Attorney General Eliot Spitzers probe.He declined to comment on whether he is close to bringing any civilor criminal actions.

The moves come in light of events in New York, where Mr. Spitzeruncovered evidence that executives at Marsh may have manipulatedthe placement of insurance contracts in return for profitablecontingency fees. The action there led to the resignation ofJeffrey Greenberg, chairman and chief executive officer of Marsh& McLennan, the parent company of Marsh. (See story, page6.)

Meanwhile, Itasca, Ill.-based broker Arthur J. Gallagher said italso received a subpoena from Mr. Blumenthals office. The brokerannounced it was ending the practice of taking contingency fees,following the lead of Aon and Willis. (See related stories, page 8and 48).

Jardine Lloyd Thompson Group also announced last week that “weare advising our clients that we are not entering into [contingencyfee arrangements] from 2005 and thereafter.”

“Recent events have all the hallmarks of being a defining momentin the history of our industry,” said JLT CEO Steve McGill. “If asa result of this investigation a more level playing field isestablished for the industry, this will clearly be of benefit toour clients and JLT.”

Reproduced from National Underwriter Edition, October 28, 2004.Copyright 2004 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.