NEW YORK (Reuters) • Marsh & McLennan Cos. Inc., the world’s largest insurance broker and risk manager, said on Wednesday that it could now receive compensation from insurers in cases where it clearly represented them.An agreement with New York Attorney General Eliot Spitzer modifies its settlement of last year that stopped Marsh from taking “contingent commissions” from insurers for steering business their way when Marsh was supposed to be representing client companies that were seeking coverage.

Marsh traded at $25.65, gaining $0.14 cents on the New York Stock Exchange. When Marsh has been named as the agent for a specific insurance company and places a line of business only with that insurer, the company is now able to share in the profits of that business, according to a company filing with the US Securities and Exchange Commission.

Aon Corp., Marsh’s largest competitor, said it expected a similar settlement. Aon had also agreed to forgo contingent commissions after a similar investigation by Spitzer.
“Aon has been in discussions with Attorney General Spitzer’s office on the same issue and we would anticipate obtaining the same result from that office,” said Aon spokesman Al Orendorff.

Karen Wall, a spokeswoman for Willis Group Holdings Ltd., the third largest insurance broker, had no immediate comment. Willis had also agreed not to take contingent commissions. Smaller insurance brokers still accept them.

Spitzer and New York Insurance Commissioner Howard Mills, who Marsh said also approved the amendment, could not immediately be reached for comment.

On Jan. 30, 2005, Marsh & McLennan settled civil fraud charges with Spitzer, agreeing to a $850 million fine and apologising to its clients.

Spitzer had accused the New York-based firm of rigging bids by steering clients to insurers who paid Marsh and other brokers “contingent commissions” based on how much business they brought in.

As a result of Spitzer’s probe, Michael Cherkasky, a former associate of Spitzer’s and a former prosecutor, became Marsh’s new chief executive, and promised a new business model.

However, Cherkasky said in an interview with Reuters on Tuesday that losing contingent commissions and other revenue had cost his company nearly $800 million a year in profit.

A Marsh spokeswoman had no immediate comment on how much revenue would result from insurers being able to compensate Marsh if it was working exclusively for them.

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