BOSTON, Jan. 8 (UPI) -- Massachusetts state officials have sued Great American Insurance Group, accusing it of bid-rigging, a claim the insurer denies.
Massachusetts Attorney General Martha Coakley alleges that in 2004, at the behest of Marsh & McLennan Cos., Great American colluded with its subsidiary, Professional Risk Brokers Inc., to knowingly submit a false high bid for casualty insurance sought by Analog Devices Inc. of Norwood, Mass., Business Insurance reported.
Analog Devices had approached Marsh Inc., the brokerage arm of Marsh & McLennan, to get another bid because it believed its insurance premium with American International Group Inc. was too high, court documents said.
As part of the alleged plan, the complaint said, Marsh contacted Professional Risk Brokers, asking that it request an "alternative lead" from Great American. When Great American submitted its $450,000 quote, Analog Services believed it to be competitive and opted to remain with AIG, which quoted $400,000. In return for the high bid on the one contract, the complaint says, Marsh allegedly steered another of Analog Devices' policies to Great American for $60,000.
Coakley said in a statement insurers such as Great American paid Marsh "lucrative contingent commissions" based on the volume of business Marsh placed with them.