FSA chief to quiz Spitzer over Marsh

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The Independent
Insurance scandal: Fears grow for broking giant as European arm pushes for Andersen-style break-up
By Katherine Griffiths in New York
27 October 2004


John Tiner, the chief executive of the Financial Services Authority, is meeting Eliot Spitzer in the United States this week to discuss the New York attorney general's escalating allegations of bid rigging and improper commissions in the insurance industry.

Mr Tiner, who arrives in New York today, will ask Mr Spitzer whether he is planning to widen his lawsuit, currently against Marsh & McLennan, to include other insurance brokers and underwriters. He is also expected to highlight concern emanating from the UK that Mr Spitzer's case could spark a global break-up of Marsh, which is one of the biggest firms in the London market, in the same way that groups of partners of Arthur Andersen splintered off to join rivals after the accountancy firm was involved in the collapse of Enron.

The FSA does not have responsibility for regulating insurance brokers in the UK until January, but it is keen to be as fully briefed as possible about the alleged abuses committed by US insurers and brokers, and the impact of Mr Spitzer's inquiry on the UK. This is especially the case as the City watchdog has been accused of being "asleep on the job" for not intervening earlier in previous crises, such as the failures of the split-capital investment trusts.

A spokesperson for the FSA said Mr Tiner had already been planning to go to New York for a meeting of the international regulators body, Iosco, and that the interview with Mr Spitzer had been arranged to fit in.

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