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Article published October 16. 2004 12:00AM

ACE executive pleads guilty

(Bloomberg) � An ACE Ltd. executive pleaded guilty to a criminal charge stemming from an
insurance fraud probe of the industry by New York Attorney General Eliot Spitzer. She is the
third person to do so in the last two days.

Patricia Abrams, a vice president in ACE�s casualty group, pleaded guilty to a criminal
charge of attempted restraint of trade and competition, Spitzer spokesman Brad Maione
said. Abrams�s misdemeanour charge carries a maximum penalty of one year in prison.

Spitzer yesterday sued Marsh & McLennan, accusing the company of bid rigging. Two
American International Group Inc. executives pleaded guilty to involvement in the bid rigging
hours before he announced his suit. Spitzer�s suit accused Marsh, the world�s largest
insurance brokerage, of steering unsuspecting clients to insurers who paid the company the
highest fees. Marsh officials rigged the bidding process by procuring phoney higher bids
from other insurers involved in the scheme, Spitzer said.

AIG executives Karen Radke and Jean-Baptist Tateossian pleaded guilty to roles in the
rigging yesterday and are co-operating with Spitzer�s investigation. Spitzer said yesterday
there would be �numerous civil and criminal cases to come.�

ACE spokesman John Herbkersman declined to comment immediately. Larry Krantz,

Abrams�s lawyer, did not return a call for comment.

Abrams submitted her plea to state Supreme Court Justice Michael Ambrecht in New York
yesterday. He also accepted the pleas of Radke and Tateossian.

Abrams is the unnamed ACE vice president that Spitzer mentions in his Marsh & McLennan
suit regarding a rigged insurance premium bid, Maione said. According to the Marsh
complaint, an unnamed vice president sent an e-mail on December 17, 2002, to Marsh
Global Broking�s Excess Casualty division, quoting an annual premium of $990,000 for a
policy for Fortune Brands Inc.. a holding company engaged in the manufacture of home,
office, liquor and golf products.

Later that day, the bid was revised to $1.1 million so ACE would be less competitive,
allowing Marsh to award the business to another insurance company, American International
Group Inc., which was in on the bid rigging, the complaint said.

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