Ace, the Bermuda-based insurer named in Eliot Spitzer's lawsuit that made allegations of bid-rigging by insurers and brokers, yesterday said it had fired two employees and suspended three others following an internal investigation into the affair.
Ace is carrying out the inquiry into practices within the firm and last week admitted it had found evidence of "improper conduct" by a small number of employees. An Ace employee has already pleaded guilty to taking part in the bid-rigging scheme.
Marsh & McLennan, the world's largest insurer broker, is still the only company facing formal charges from New York's combative attorney general. Marsh has dismissed four executives who allegedly took part in the scheme that Mr Spitzer has focused on.
The relationship between Marsh and Ace has been in the spotlight because of the close ties between the two companies. Jeffrey Greenberg, Marsh's chief executive who was forced out after Mr Spitzer launched his lawsuit, is the brother of the head of Ace, Evan Greenberg. Their father is Maurice "Hank" Greenberg, who runs the giant insurer American International Group. AIG allegedly took part in the scheme orchestrated by Marsh to manipulate customers into taking out policies with particular insurers even though better deals were available.
Ace said the employees sacked were Geoffrey Gregory, the president of Ace Casualty Risk, and Patricia Abrams, a vice president of that division.Ms Abrams and two AIG employees last month pleaded guilty to charges that they organised bogus insurance bids in order to gain inappropriate fees from customers. Among those sacked from Marsh were William Gilman, formerly the executive marketing director of its global broking division. The insurance industry fears Mr Spitzer will widen his formal charges to include other brokers and insurers. He is looking closely at Aon, the No 2 broker.
Ace also said that it would introduce reforms to ensure its processes would be entirely in keeping with good practice.
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