Spitzer takes on group life and health.
Culminating an expected second stage of his investigation--focused on compensation and distribution in the life, accident and disability insurance markets--Spitzer alluded to his earlier suit accusing top commercial broker Marsh & McLennan Cos. of soliciting false and fraudulent bids, declaring in a statement that the case against ULR "demonstrates that the corrupt practices first laid bare in the Marsh suit are present in additional sectors of the industry."
Filed in state Supreme Court in Manhattan, Spitzer's suit names ULR, Chief Executive Officer Douglas P. Cox and two affiliated corporations--Universal Life Resources and Benefits Commerce--and alleges that the benefits broker hid additional compensation provided by insurers by charging significantly above market rates for "communication services"--such as the printing of informational materials, and refused to deal with insurers who would not go along with the arrangements. The fees, which Spitzer said were omitted from mandatory government filings, represented $5.6 million of ULR's $25.3 million in 2003 revenue, the suit charges.
A 5-year-old consultancy held by Cox as sole shareholder, ULR is characterized in the suit as "one of the most influential players in the niche area of providing employee benefits consulting to employers with more than 10,000 employees for group life, disability, and other insurance."
The suit specifically mentions insurers MetLife Inc., Prudential Financial Inc. and UnumProvident Corp. as taking part in the arrangements with such clients as Intel Corp., Colgate-Palmolive Co., Eastman Kodak Co., Marriott International Inc., United Parcel Service Inc. and Dell Inc.
ULR had previously been named in a California suit brought by consumer United Policyholders--represented by Lerach Coughlin Stoia Geller Rudman & Robbins--that also charged the national group life, accident and disability consultant with failing to adequately disclose override commissions and communications fees on the placement of group benefit plans. That suit also named MetLife, Prudential and health insurer Cigna Corp. as defendants.
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|Date:||Dec 1, 2004|
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