Leading broker Marsh & McLennan has agreed pay $850 million to settle charges brought against it by New York Attorney General Eliot Spitzer last October.

Although this settles the matter between Mr. Spitzer's office and Marsh - for charges of fraud and anti-competitive practices - it does not end the Attorney General's scrutiny of the industry.

In a Press statement announcing Marsh's agreement to pay the millions “in restitution”, Mr. Spitzer said a “joint investigation by Attorney General's office and Insurance Department is continuing”.

In a separate Press statement, Marsh said that the $850 million was going into a fund to compensate clients. It has also vowed to “enact reforms to lead the industry in transparency and service to clients”.

The sum is more or less on par with the value Marsh saw in contingent commissions in one year alone, with the brokerage being said to have collected about $800 million in such ‘override' payments in 2003, according to the complaint. Marsh said it was neither admitting nor denying the allegations made against it in Mr. Spitzer's suit, and that “no part of the fund represents a fine or penalty”.

The New York Attorney General's office said in a Press statement posted to its website that Marsh had issued a public statement in which it apologised for “unlawful” and “shameful” conduct.

In the statement, Mr. Spitzer added: “To its credit, Marsh is not disputing the problems identified in our original complaint.”

Although Marsh was the only defendant named in the civil suit against it, several insurers - including Bermuda-based ACE Limited - were named in the action as allegedly having taken part in bid rigging to create a sham appearance of competition, as well as paying contingent commissions for business.

To date no charges have been brought against the companies named in the Marsh suit, however six executives from three companies have pleaded guilty to criminal charges related to the scheme, Mr. Spitzer's office said. In regards to ACE, the suit alleged that its US-based casualty risk unit had taken part in bid rigging with Marsh. It was not known if the New York Attorney General's office will pursue any action against ACE. However, one of the six pleading guilty was ACE Casualty Risk employee Patricia Abrams.

She and ACE Casualty Risk president Geoffrey Gregory were later sacked.

In addition, Susan Rivera, the head of ACE's largest US operations - ACE USA and ACE INA Holdings - resigned in early January without reason. Speculation was that her sudden departure was linked to her alleged knowledge of bid-rigging between the ACE casualty risk unit and Marsh long before the investigation, but did not stop it.

Mr. Spitzer's office said previously that the six executives already charged have been cooperating.

“These criminal cases will permit us to make criminal cases and bring criminal actions against more senior executives within the companies.

“We are moving forward very aggressively with criminal cases against individuals and will pursue those as far up within the structure of these companies as we possibly can,” he said.

A Wall Street Journal report in October said: “By helping the Attorney General build his case, ACE and the other insurers were hoping to get credit for cooperation and reduce their eventual punishment.

“But ACE's cooperation is seen by investigators as less than complete, according to a person familiar with the investigation.”

So far, all executives charged have been ‘mid-level' employees but Mr. Spitzer said future charges are more likely to target senior executives.

Marsh was said to have narrowly avoided criminal proceedings by axing then CEO Jeffrey Greenberg - brother of ACE Limited CEO Evan Greenberg - as well as other staff and several directors handing in notice. Marsh's new boss, Michael Cherkasky was once Mr. Spitzer's superior.

Although ACE has not faced charges from Mr. Spitzer, it is subject to a suit from Connecticut Attorney General Richard Blumenthal after allegations that its financial solutions division paid Marsh a secret $50,000 commission to steer an $80 million state contract to the company.