(Bloomberg) -- Marsh & McLennan Cos.'s UK unit didn't engage in bid rigging or false quotes, according to a probe commissioned by the world's biggest insurance broker.

The investigation did find a potential conflict of interest in fee arrangements the unit had with some insurers that have now been abandoned, law firm Freshfields Bruckhaus Deringer said in a report released by Marsh today.

The broker hired Freshfields to probe the UK unit after New York Attorney General Eliot Spitzer sued Marsh on October 14, accusing it of rigging bids in the US and steering clients to insurers that paid the highest fees.

European insurers including Aegon NV and Munich Re have been subpoenaed for information about the industry in several US states as the probe widens.

"We have not found any instances where clients have suffered actual prejudice or disadvantage," the London-based law firm said the report.

The Freshfields probe focused on additional commissions paid by insurers. The payments, known as market service agreements or contingent commissions, may boost fees earned by a broker if it places more business with a particular insurer, Freshfield said.

The agreements, which Marsh dropped on October 1, may have pressured some brokers to steer clients to insurers paying higher fees. The extra commissions "represented a significant source of income" for Marsh UK according to the report.

Shares of Marsh dropped five cents to $28.77 in New York Stock Exchange composite trading. The stock has fallen 38 percent since Spitzer's suit was announced.

The UK's Financial Services Authority is under pressure from companies including Hardy Underwriting Plc. and buyers of insurance to investigate the practice of insurers paying extra commissions to brokers to secure business.

The use of these agreements was widespread in the UK insurance market and were viewed as common market practice, Freshfields said.

In June, the FSA warned chief executives of life and property and casualty insurers and brokers against making and taking "inducement payments." The FSA will start regulating the UK insurance industry on January 14, 2005.