Eliot Spitzer has been kicking the asses of Wall Street corporate thieves for some time now. These days, he’s turned to an industry everyone knows has to be rife with corruption as well — insurance companies. In this case, he’s been busting workplace insurance brokers like Marsh & McClennan, and now Universal Life. This is a fairly dry white-collar crime story to the average Joe to grasp, but these middleman companies affect the premiums that come out of your paycheck. It’s a easy grab, and these companies know it. Spitzer has caught them red-handed funneling contracts insurance companies in exchange for millions. It’s a white collar pickpocket operation, and these bastards need to go down.
The attorney general, Eliot Spitzer, sued Universal Life Resources, accusing the firm of steering business to insurers like MetLife, Prudential and Unum Provident in exchange for millions of dollars in payments, which, until 2003, were not properly disclosed. The insurance coverage was bought for employees of companies like Viacom and Intel. The complaint also contends that Universal Life inflated certain fees relating to benefit enrollment materials, ultimately passing that cost onto the client’s employees.
Mr. Spitzer’s lawsuit against Universal Life is the second against an insurance broker since his investigation of the industry began last spring. The investigation’s focus has been on bid-rigging by brokers of commercial insurance, resulting in a lawsuit against Marsh & McLennan, the biggest insurance broker, on Oct. 14.
Like Marsh, Universal Life is another influential middleman, but in the area of employee benefits: the life, disability and accident insurance a company obtains for its workers. While the earlier lawsuit portrayed corporations as the victims, investigators said the latest action directly affected individuals.
“This case brings the insurance industry fraud that we have uncovered to the ordinary consumer, where monthly premiums have been inflated by the gamesmanship and illegal conduct of U.L.R. and the carriers,” Mr. Spitzer said yesterday. “This conspiracy to defeat competition and push business not to the lowest-cost provider but to the company willing to make a payoff is destroying competition.”