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Ohio Sues Marsh & McLennan, AIG, Other Insurers

The state of Ohio has filed an anti-trust lawsuit accusing Marsh & McLennan, AIG and three other insurers and their subsidiaries of price fixing and other anti-competitive behavior, Attorney General Marc Dann said on Monday.

The lawsuit, filed on Friday in Cuyahoga County Court of Common Pleas, accused the companies of participating in an "unlawful conspiracy to allocate customers, divide markets and restrain competition" for casualty insurance policies for businesses in Ohio between January 2001 and late 2004.

Commercial casualty insurance includes workers compensation insurance, which protects companies from liabilities from worker injuries.

Marsh & McLennan spokesman Mike Kachel said the company has already settled claims brought by most of its clients and intends to "vigorously" defend itself against the lawsuit.

A spokesman for AIG, the world's largest insurer, had no comment on the lawsuit.

Following a three-year investigation by Dann, the lawsuit accuses Marsh & McLennan of orchestrating a secret conspiracy to artificially inflate prices while feigning competition.

The other defendants are ACE, Chubb and Hartford Financial Services Group. The companies could not be reached for comment late on Monday.

Zurich American Insurance, a subsidiary of Swiss insurance company Zurich Financial Services Group, entered a $7 million settlement with Ohio in October 2006 as part of the same investigation.

Dann said in a statement that Zurich and other insurers were cooperating with state prosecutors to build a case against the defendant companies.

Marsh & McLennan paid $850 million in fines and restitution to settle allegations of bid rigging in a 2005 lawsuit brought by then-New York Attorney General Eliot Spitzer.

Marsh & McLennan's Kachel said the Ohio lawsuit "does nothing more than rehash old allegations that Marsh settled with the (New York) attorney general in 2005."

As part of that settlement, the company agreed to pay nearly $35 million to clients in Ohio, Kachel said. "Those clients overwhelmingly agreed not to file future claims against the firm over these same issues," he added.

The lawsuit seeks to ban the companies from engaging in the alleged anti-competitive scheme, to force them to disgorge any profits from it and to assess damages.

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