The US broker at the centre of allegations of rigging bids for favoured insurance firms at the expense of its clients has a profitable subsidiary in the International Financial Services Centre (IFSC).
Marsh and McLennan, which faces a civil lawsuit filed 13 days ago by Mr Eliot Spitzer, the New York attorney general, set up its Irish subsidiary, Marsh Global Broking Dublin, in 1999.
The articles of association of the Irish firm show that it was established to act as a broker and agent in insurance and for all classes of pension schemes. Its location in the IFSC suggests it operates mostly overseas.
The IFSC company declined to comment yesterday and its US parent did not return calls.
A spokesman for Mr Spitzer's office confirmed that Marsh Global Broking is the US firm at the centre of its inquiry into "contingent commissions" - fees and bonuses paid by insurers to brokers for selling their products.
He said the attorney general's investigation had not been extended to look at subsidiary operations of Marsh Global Broking overseas as the office did not have any legal jurisdiction to subpoena documents abroad.
The civil suit filed this month by Mr Spitzer alleges that Marsh & McLellan created an office in Manhattan called Marsh Global Broking in the late 1990s which was given authority over all of Marsh's contingent commission agreements in the US. It then created a "tiered report", putting insurance firms on different levels depending on how advantageous their contingent commission agreements were to Marsh.
The lawsuit quotes one Global Broking executive stating: "We need to place our business in 2004 with those that have superior financials, broad coverage and pay us the most."
The latest financial accounts for Marsh Global Broking Dublin show it increased profit by almost €3 million in 2002 and had net assets worth €6 million. Filings with the Companies Registration Office show that it changed its name to Marsh Global Markets Dublin Ltd earlier this year.
The existence of a Marsh subsidiary in the IFSC is not surprising given its popularity as a global finance centre.
US firm Marsh & McLellan also owns one of the State's biggest insurance brokers, Marsh Ireland, which, on foot of the Spitzer inquiry, suspended all "market service agreements" - also known as contingent commissions - on 15th October.
A Marsh spokesman said this week that from the beginning of next year its offices in the Republic will not be allowed to accept contingent commissions - paid for by the sale of high volumes of expensive products - from insurers and will have to disclose all payments from insurers to clients.
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