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Employers Reinsurance Corporation (ERC), a unit of GE Insurance Solutions, said it had given an insurance broker inflated price-quotations, making it the first company to report finding problems related to bid-rigging that was not already implicated in lawsuits filed by New York Attorney General Eliot Spitzer.
ERC based in Kansas City, Missouri, said a former and current employee had provided insurance broker Marsh & McLennan with artificially high quotes in fewer than 10 cases totaling less than $1 million in premiums last year. ERC claims that the problems were "isolated and confined" as they wrote policies generating more than $9.3 billion in premiums.
The former employee of ERC left almost three years ago, while the current employee has been suspended. ERC said it has reported its findings to Spitzer's office and is continuing its internal investigation.
ERC had begun an internal investigation about five weeks ago stating that they would cooperate with the investigation, but adding that its internal review suggested that problems were limited to its excess workers-compensation business, which provides extra insurance beyond an employer's standard coverage.
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