Zurich suspends US workers in insurance review
Swiss insurer, Zurich Financial Services, has suspended several employees in the United States as part of an internal review into how policies are handled.
Zurich said the review was linked to a subpoena it had received from New York Attorney General, Eliot Spitzer, who is probing price rigging in the industry.
Zurich stressed it was not a defendant in the Spitzer probe, but that it was cooperating because of the subpoena.
“This review process… has led to the suspension of several employees of the Excess Casualty underwriting unit in the Specialities Business of Zurich North America Commercial,” the company said in a statement on Friday.
Several leading insurers have been subpoenaed as part of the probe into contingent commissions – profit-sharing arrangements whereby insurers pay brokers to steer customers their way.
Bid rigging
Zurich’s review is related to its business with the world’s biggest broker, Marsh & McLennan, which was sued by Spitzer in October for alleged bid rigging.
Zurich’s chief risk officer, Wayne Fisher, said earlier this month that the company was reviewing its policy on the controversial contingent commissions that are at the heart of the US probe.
Marsh & McLennan is accused of cheating corporate clients by rigging bids and collecting huge fees from major insurance companies for allocating business to insurance firms, Zurich Financial said.
“Obviously, we have concerns,” Zurich Financial’s media relations director Daniel Hofmann told swissinfo.
“We have internal standards of how we do things, and we have concerns which led to this action. These need to be addressed.”
Not sacked
Zurich declined to say how many employees had been suspended, but stressed that they had not been sacked.
Hofmann said “about two dozen people” work at the unit concerned.
“I don’t want people to jump to conclusions, nobody has been fired,” he said. Employees will continue to draw salary but need to be available for questioning, he added.
Zurich also said it hadn’t been subpoenaed in any other US state, unlike some of its competitors.
With annual written premiums and policy fees of around $48.9 billion (SFr37.9 billion), Zurich Financial is among the top three players in the US property and casualty insurance industry.
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Founded in 1872, Zurich Financial is Switzerland’s largest insurer.
With offices in 50 countries it employs 50,000.
Gross written premiums and policy fees increased 18% in 2003, to $48.9 billion.
Zurich in the United States suspended several employees after an internal review concerning its business with insurance broker Marsh & McLennan.
Marsh & McLennan stands accused of rigging bids and collecting huge fees from major insurance companies in exchange for giving them business.
Zurich Financial is facing no specific charge.
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