IE 11 is not supported. For an optimal experience visit our site on another browser.

Improper practices uncovered at Aon Corp.

The office of New York Attorney General Eliot Spitzer has uncovered evidence of improper business practices at Aon Corp., the world's second-largest insurance broker, the New York Times reported late Sunday.
/ Source: Reuters

The office of New York Attorney General Eliot Spitzer has uncovered evidence of improper business practices at Aon Corp., the world's second-largest insurance broker, the New York Times reported late Sunday.

Citing a person close to the matter, the Times reported that the investigators have discovered evidence of deceptive and coercive practices at Aon, and could bring a civil lawsuit against the company within two weeks.

Accusations that major insurance brokers have cheated customers by faking bids, fixing prices and steering business to favored insurance companies have roiled the insurance industry over the past two weeks.

While the investigators have found what they regard as antitrust violations at Aon, they so far have found no evidence of bid rigging and price fixing, the newspaper reported, citing people briefed on the case.

At Aon, the Times reported, investigators have found documentation of brokers steering business to insurers that paid the company incentives.

They also uncovered evidence of tying -- a practice that entails brokers threatening to curtail sales for an insurance company unless the insurer lets the broker also arrange its own coverage needs or reinsurance.

The Times, citing its unnamed source, also reported that investigators are expected to file lawsuits shortly against some smaller national insurance brokers.

Spitzer has filed suit against Marsh and McLennan Cos., the world's largest broker, which is reportedly considering ousting its chief executive, Jeffrey Greenberg. On Friday, Aon said it would stop taking so-called contingent commissions from insurance companies, in addition to commissions from insurance-buying clients.

A representative from Aon was not immediately available to comment on Sunday.