Some of the world’s largest insurance companies, along with the world’s largest broker, have been accused of anti-competitive practices and a far-reaching conspiracy to fix prices.

Ohio Attorney-General Marc Dann has filed suit against Marsh, American International Group, Ace Insurance, Chubb Corporation and the Hartford Financial Services Group.

He alleges Marsh arranged to insulate the participating insurers from competition within the group. He says each insurer submitted uncompetitive bids for business “owned” by another member.

When presented with several “B” quotes and a single genuine quote from the current insurer, Marsh & McLennan clients were convinced the broker had got the best possible deal.

Mr Dann says the practice has cost Ohio businesses millions of dollars. Affected citizens of Ohio have access to part of the $US850 million ($1.04 billion) settlement that Marsh negotiated with then New York Attorney-General Eliot Spitzer. However, Mr Dann says the damage bill in his state is much higher.

Marsh says it has co-operated with the investigation but will fight the allegations in court. Hartford and Chubb are also defending the claim.