Marsh will pay $850m and seek share value restoration after Spitzer investigation.

(From Lloyds List)

MARSH ' McLennan Cos, the financial services group that includes the world's largest insurance brokerage, is to pay $850m to settle an investigation into charges it sought money from insurance companies to steer clients their way, writes James Brewer.

The deal ends immediate concerns for Marsh, which was plunged into turmoil when New York attorney general Eliot Spitzer put it in the dock in October 2004, although it remains as do some other broking houses and insurers subject to inquiries by US state regulators.

Marsh is to pay the $850m over four years to policyholders, change its practices and issue a public apology calling its conduct shameful and contrary to stated policies.

It neither admitted nor denied wrongdoing. There had been speculation that Marsh would settle for figures ranging from $650m to $1bn, but that during negotiations it was initially reluctant to offer an apology.

Of the eventual figure, Mr Spitzer said: 'It is one of the largest restitution funds in history that we are aware of from a single company. We are establishing new ethical ground rules for this industry.'

A priority for the company is now likely to be restoring its share price, which was badly shaken by the affair. In a first reaction to the news, the stock rose 4% to $32.40 in New York.