Ore. Regulators to Probe Insurance Industry
Oregon regulators are investigating potential illegal activity in the state’s insurance industry, after allegations that brokers may have steered business to preferred insurers, in exchange for commissions.
The brokers range from community insurance agents to large firms, and the insurers in questions may have sold automotive, property, life and health insurance.
State regulators in Oregon are also considering a package of new rules that would require insurance brokers in the state to disclose conflicts of interest up front without being asked, Joel Ario, administrator of the Oregon Insurance Division, told The Oregonian.
Last week, New York Attorney General Eliot Spitzer accused insurance broker Marsh & McLennan Cos. of rigging bids and colluding with American International Group Inc. and other insurance companies to fix prices.
The Oregon Department of Consumer & Business Services, working with the Department of Justice, is expected to join similar investigations in other states in a coordinated effort by next week, Ario said.
Insurance brokers applauded the state proposals but cautioned against unnecessary added regulations.
“I’ve seen overreaction before,” said Clark Sitzes, executive director of the PIA Western Alliance, which represents more than 1,500 independent insurance brokers in nine Western states, including about 200 in Oregon. “But anything that would affect the consumer or could lead to fraud, there needs to be disclosure. We would support any measures that would eliminate or decrease potential fraud.”
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