According to California officials, their investigation found that former Marsh employees would direct insurers to submit false, fictitious or inflated bids to help the broker retain current business and keep its prices high.

“For example, a Marsh broker might ask an insurer to submit a quote. But rather than seek the best quote, the Marsh broker specified an amount designed to help Marsh retain its current policyholder at the desired rate or higher,” the department stated.

As part of the deal:

o An estimated $100 million will go to wronged California policyholders from the $850 million fund established by the global settlement reached between Marsh and New York State in January 2005. The California department will monitor distribution of those funds.

o Going forward, the California settlement requires Marsh to disclose in “plain, unambiguous” language the terms of the commissions it receives.

o The New York-based brokerage is also required to implement standards of conduct regarding compensation from insurers consistent with the terms of the settlement.

o Marsh must establish a Compliance Committee among its board of directors to monitor the company's adherence to the standards of conduct regarding compensation from insurers.

Improper conduct by brokerages in the sale of commercial insurance surfaced in October 2004, when New York Attorney General Eliot Spitzer's office revealed evidence of bid-rigging and insurer use of hefty, hidden, volume-based contingency commissions to reward brokerages that steered business their way, regardless of whether it was the best bid available.

Since that time, the major brokerages have done away with those contingency commissions.

While MMC hoped to put the scandal behind them with its New York settlement, last week Florida filed a civil racketeering suit against the brokerage for commercial insurance bid-rigging.