The world's largest insurance broker, sued by New York Attorney General Eliot Spitzer earlier this month, is the same company hired to manage the nonprofit entity that makes sure South Carolina's health care professionals have medical malpractice coverage.

Spitzer sued Marsh & McLennan Companies, which employs about 42,000 people in 410 offices in more than 100 countries, charging it with steering unsuspecting clients to certain insurers in exchange for lucrative payoffs.

Marsh has a fixed-price contract for processing claims and providing support services for the South Carolina Joint Underwriters Association, but it has no role regarding insurance placement, said Dr. Daniel W. Brake of Charleston, the association's board chairman. The association is administered at Marsh's Greenville office.

The Joint Underwriting Association was formed in the late 1970s when the state medical association asked the General Assembly for a system to provide coverage for health care professionals at the lowest rates possible. The 11 members of the underwriting association's board are appointed by the governor.

The three-year contract with Marsh & McLennan expires at the end of the year, and the board already had begun negotiations with Marsh & McLennan and other companies for a new contract.

Negotiations were under way before Spitzer filed the lawsuit, Brake said. While the board is not aware of any mishandling of the management service agreement by Marsh, the situation in New York has prompted the association's legal representatives to ask for assurances from Marsh & McLennan that the company has not acted improperly in its role as the association's administrator.

"We were in the process of negotiating a new contract with (Marsh) and possibly looking at some other companies," Brake said. "We've said that unless we're assured that everything has been -- and will be done -- properly, we're not signing a contract with any company.

"We're not going to sign any new contracts until all this is cleared up."

The New York lawsuit has another South Carolina connection. It cites the insurance broker's work for the Greenville County Public School District as an example of the broker's manipulation of the bidding process to generate "contingent commissions." Such commissions are paid by insurance companies to brokers for steering business their way, a practice Spitzer claims generated billions of dollars for Marsh & McLennan.

The Greenville district borrowed $800 million two years ago to finance new school construction and extensive renovations needed to many of its existing schools. Marsh & McLennan, as the county's insurance broker, provided three bidders to insure the project.

Two of the bids were from serious bidders, according to the lawsuit. But unknown to the school district, Marsh offered the Greenville project to one of the bidders, Zurich North America, in an effort to entice Zurich to sign a contingent commission agreement.

Marsh then submitted a "wholly fictitious" bid from a third insurer who had no intention of bidding on the Greenville project and did not authorize the bid, the lawsuit states.

The lawsuit also claims Marsh failed to disclose that it was seeking a contingent commission from Zurich, and Zurich was later awarded the project based on Marsh's recommendation.

"Marsh's involvement with the Greenville Public School District illustrates how Marsh both abused its fiduciary role in an attempt to secure a contingent commission agreement with an insurance company and rigged the bidding process," the lawsuit states.

As the New York insurance investigation spreads to other insurers around the country, with Spitzer targeting more of the country's top insurers, Brake said day-to-day operations at the underwriters association would not be affected.

"We'll continue to function as we have over the last few years," he said, "but we are certainly going to stay abreast of any developments in New York."