Spitzer Strikes Again

(2 of 2)
In this latest fight, Spitzer is again crusading against the system. Last week's suit outlines Marsh's deals with several big insurers, suggesting that price fixing and kickbacks may be widespread in the industry. "When you corrupt a market as the insurance carriers and brokers have by permitting cartel-like behavior, prices go up," says Spitzer. He has issued dozens of subpoenas targeting companies like Aon, Willis Group Holdings and, as was disclosed last week, MetLife. Two executives at AIG and one from insurance company Ace, which were mentioned in the Marsh suit, pleaded guilty to charges last week. AIG CEO Maurice Greenberg promised to cooperate. But analysts aren't betting on a quick fix. "The conflicts of interest [in the industry] are pervasive," says Martin Weiss, chairman of Weiss Ratings, an independent insurance-rating firm.

How the Greenberg insurance dynasty will weather Spitzer's latest assault is unclear. Hank and his sons Jeffrey and Evan, CEO of Ace, are widely respected as the first family of insurance. But each now has the rare distinction of heading a firm mentioned in a Spitzer lawsuit. Is Jeffrey really responsible for unethical practices at Marsh? Says Spitzer: "When you have an $800 million stream of income, one has to be either ignorant, lazy or complicit not to examine how this money is being derived." He's clearly ready for another fight.