Ethics

ETHICS The redress effort has been hit hard with the findings of unethical behavior. To be more specific bid rigging and contingent commissions are what have several insurance companies in trouble with the government. aggrandisement insurance companies, such as marshland & McLennan, AIG, Aon, and A.J. Gallagher, among others are universe investigated and even charged with unethical channel answers. Eliot Spitzer, the New York lawyer General, has spear headed investigations into several companies where contingent commissions and bid-rigging were used to gain business for certain companies. The insurance companies would give the brokers, such as marsh & McLennan, a kickback in the form of contingent commissions for placing business with them. Marsh & McLennan was also found to bid rig premium quotes in which they would submit inflated competing quotes so as to place insurance with their favored carrier meeting their quotas to qualify for the contingent commissions. This practice harms the customer as they wind up paying a higher premium for their policy than is necessary. This also puts money in the pockets of the companies involved with this illegal practice as well as giving a false view of the companys monetary situations.

This type of agency problem not only affects consumers it affects shareholders as the price of the firms stock, due to deception and fraud, becomes elevated just once the discovery of the unethical practices was released stock prices for these companies plunged not to remark the quality of their reputation. The few companies that have caused this investigation have bear upon the whole insurance industry. Consumers are more cautious, investors are utilization their rights, other insurance companies are reviewing their practices, and the government is looking at ways to place better controls on ethical behavior. capital of Minnesota Winston, Editorial Director for Business Insurance, has stated that this investigation has met the industrys reaction with a mix... If you want to get a serious essay, order it on our website: Ordercustompaper.com

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