Universal Life Resources has agreed to pay $2,000,000 to settle allegations by New York Attorney General Elliot Spitzer that the company was paid secret, undisclosed commissions to steer business to certain insurers. Universal Life admits no wrongdoing and the company will still be in business, but has agreed to have its insurance operations reviewed.
A while ago, Marsh and McLennan, also known as Marsh, Inc, the world’s largest insurance broker, also agreed to a settlement with AG Spitzer for accepting payments to steer clients to certain insurance companies. These cases deal primarily with large corporations as the premiums are so large.
However, do not be surprised to find out it happens on a smaller level as well. An insurance company who can increase its number of insureds by 10% will gain a marketing advantage. It may be worth some money to large brokers to try to get that done. Now, I am not saying it happens, but the possibility is there. That is why I always recommend you call a few agents and a few brokers to get price comparisons.
Finally, why is it always AG Spitzer doing this great work? Where is the California AG? The California Insurance Commissioner? Why aren’t they regulating the insurance industry?
Kudos to Mr. Spitzer.