Two insurance brokers have revealed they have been subpoenaed in the ongoing investigation of contingency fees by New York Attorney General Eliot Spitzer.
Cleveland-based CBIZ Benefits & Insurance Services of Ohio said its subsidiary, CBIZ Benefits & Insurance Services Inc., has received a subpoena from New York's attorney general requesting information about broker compensation. The announcement was made in a press release on Friday.
Greater Bay Bancorp, a financial services firm based in East Palo Alto, Calif., said its subsidiary, ABD Insurance and Financial Services, received a subpoena from Mr. Spitzer's office on Oct. 20. It said the firm has received requests for information from several state insurance commissioners in the past.
In an 8-K filing with the Securities & Exchange Commission yesterday, Greater Bay said it conducted a review of its own practices and found no evidence of improper activities.
Both companies said they would fully cooperate with the request.
During an analyst's conference call today, J. Patrick Gallagher Jr., president and chief executive officer of Arthur J. Gallagher, said that it appears the number of requests for information is declining.
Gallagher was one of the big-four major brokerage firms that agreed to give up contingent commissions after official allegations that the firms engaged in steering insurance contracts to insurers in exchange for lucrative contingent commission payments.
To date, more than $1 billion has been paid by the brokers in settlements that will go to clients in the form of refunds.
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