The man who outlawed contingent commissions issues a public apology for hiring a prostitute
Eliot Spitzer, the man who spearheaded a widespread investigation into the insurance broking industry during his term as New York attorney general, is now himself at the centre of a scandal.
Spitzer reportedly hired a high-end prostitute, according to the New York Times.
Despite issuing a public apology he has not offered to resign from his position as New York governor.
In the apology, issued on his official www.ny.gov website, Spitzer says:
“Over the past nine years, eight as Attorney General and one as Governor, I have tried to uphold a vision of progressive politics that will rebuild New York and create opportunity for all. We sought to bring real change to New York, and that will continue.
“Today I want to briefly address a private matter. I have acted in a way that violates my obligations to my family, and violates my -- or any -- sense of right and wrong. I apologize first and most importantly to my family. I apologize to the public, whom I promised better. I do not believe that politics in the long run is about individuals. It is about ideas, the public good and doing what’s best for the state of New York.
“I have disappointed and failed to live up to the standard I expected of myself. I must now dedicate some time to regain the trust of my family. I will report back to you in short order.”
Spitzer made a name for himself in the insurance industry when he went on a mission to uncover bad practices in the broking industry.
Over a three year period, beginning in 2004, Spitzer took a number of brokers and insurers to task on practices including contingent commissions, bid rigging and price fixing.
Marsh eventually settled for $850m, Aon for $190m and Willis for $51m. None admitted liability, most issued apologies but all abolished contingent commissions.
Since Spitzer’s investigations, these major brokers have struggled to find new revenue streams in the absence of contingent commissions.
All have implemented cost cutting and restructuring programmes and Aon and Marsh have both chosen to shift the focus from broking to their risk management businesses.