Isle insurer sues
state for snub
in bidding

Aon Risk Services claims that
some steps were bypassed in
the selection process

By Russ Lynch
Star-Bulletin

A Honolulu insurance business is suing the State of Hawaii, charging that it was improperly dropped out of the running for work as an insurance broker for the state government.

Aon Risk Services Inc. filed suit in Circuit Court yesterday accusing the state Department of Accounting & General Services of bypassing the steps the state spelled out in its request for proposals to provide risk insurance for the state.

John D. Beck Jr., president of Aon Risk, said the company is charging that the state "summarily rejected" Aon's proposal, contrary to the recommendation of a selection committee, and "arbitrarily selected another brokerage firm," Marsh USA Inc.

Raymond Sato, state comptroller and head of DAGS, declined to comment on the case, except to say that he had received the lawsuit and sent it to the attorney general's office.

He said the state selects an insurance firm every five years to provide risk coverage, such as workers compensation, for the whole state. Aon had the latest contract, he said.

Beck said Aon has worked with the state for 10 years "throughout some very difficult times."

"However, we feel strongly that once the RFP was issued and the process established, it should be followed. Further, it is unconscionable that the contract was awarded without any type of competitive pricing," he said.

Aon is part of a large national insurance company that entered the Hawaii market in the early 1960s with the purchase of to B.F. Dillingham Agency. The company has some 70 employees. Beck said the company is asking the court to declare that an illegal selection process was used and to order a new selection.