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Connecticut AG Sues Marsh, ACE
Blumenthal accuses insurers of illegal commissions.
January 21, 2005: 6:05 PM EST
By Aaron Smith, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Connecticut Attorney General Richard Blumenthal on Friday sued insurance companies Marsh & McLennan, Inc., and ACE Financial Solutions, Inc., alleging a kickback scheme in an $80 million state contract.

Bermuda-based ACE is accused of paying a secret $50,000 commission to Marsh, a leading insurance brokerage, so that Marsh would steer an $80 million state contract to ACE, according to the attorney general's office.

"This lawsuit, the first of a series anticipated against insurance abuses, shows particular arrogance and avarice in victimizing the state and its taxpayers," said Blumenthal.

In April 2001, the Department of Administrative Services paid Marsh $100,000 to act as its consultant in hiring an insurance company to administer 678 workman's compensation cases involving state workers with serious injuries. In accepting an additional fee, Marsh broke its contract with the state, according to the attorney general's office.

Marsh is accused of keeping this extra commission secret from the state, and failing to inform the state of ACE's serious financial difficulty resulting from claims stemming from the terrorist attacks of Sept. 11, 2001. The state awarded the contract to ACE in November of that year.

Spokespersons for the insurers said their firms are cooperating with investigators.

"We've been providing information to the Connecticut Attorney General and we will continue to cooperate with him," said Marsh spokeswoman Barbara Perlmutter.

"We've been cooperating and we continue to cooperate with the state of Connecticut and other state jurisdictions," said ACE spokesman Robert Grieves.  Top of page

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