New York Attorney General Eliot Spitzer has subpoenaed Liberty Mutual Group for possibly questionable sales tactics, The Boston Globe reports. The company is the first in the Boston area to be included in the quickly developing probe into the insurance industry. Last week, Putnams parent company and the worlds No. 1 insurer, Marsh & McLennan, was sued by Spitzer for allegedly sending clients off to the insurers that gave it the most money.
A Liberty Mutual spokesman, reached by the Globe, said his company does not talk about regulatory procedures. But a person familiar with the investigation said the reason Spitzer subpoenaed Liberty Mutual, the nations sixth-largest property and casual insurer, was more because of the companys size and perhaps less because of any specific evidence he has. According to the source, several other companies have received information requests and subpoenas from Spitzer.
Spitzer has said that the insurance industrys "fundamental business model" is fragmented, and his stance seems to be just as hard as it was when he went after the mutual fund industry in that still ongoing probe.