A recent survey by Standard & Poor's found that mostinsurance executives and analysts see New York Attorney GeneralEliot Spitzer in a positive light, saying that his investigationsof their industry will improve it.

The survey, conducted at S&P's annual insurance conferencein New York last month, found that 75 percent of 100 executives andanalysts who took part in the poll believe Mr. Spitzer's probeswill “help the industry in the long run.”

Commenting on the result, S&P Managing Director Steve Dreyersaid it's becoming apparent to many insurance participants that thecosts of fines and settlements from industrywide probes will bemanageable, and that these probes will likely bring about positivechanges.

“Survey respondents are likely looking past the near-term impacttoward the benefits of better disclosure by chastened insuranceexecutives,” Mr. Dreyer said.

However, the survey also indicated that while insuranceexecutives see investigations as a net positive, some still harborconflicted feelings about regulatory probes and their negativepublicity. The poll found that 37 percent of those surveyed cited“increasing regulatory risks” as a major concern.

When asked to respond to S&P survey results, a major insurertrade association, which has been critical of Mr. Spitzer'stake-no-prisoners style, reacted in a way that somewhat mirroredexecutives' mixed feelings on the subject.

According to the Property Casualty Insurers Association ofAmerica, Mr. Spitzer's investigations are good at unveiling andpunishing a few industry bad guys, but the organization objects to“the tactics that are used, the trial by media, and Mr. Spitzer'sallegation that this is a vast industry conspiracy.”

“This really unfairly tarnished the entire industry. God knowswhat Mr. Spitzer did to the industry's stock prices, not to mentionits credibility in the eyes of consumers,” said Joseph Annotti, PCIsenior vice president of public affairs.

He added, “One silver lining is that the wrongdoers will bepunished and others in the industry with any inclination to getinvolved in illegal activities will get the message.”

At the S&P conference, Stephen Lilienthal, chairman andchief executive of Chicago-based CNA, was among three industryexecutives who took up the topic during a panel discussion.

“The issues that are being looked at right now, in general, areoverdue in terms of evaluation and regulation,” said Mr.Lilienthal. “I think, in general, what you're going to get is avery cumbersome and intense process for a while,” he said,broadening his remarks to comment on executive involvement inmeeting Sarbane-Oxley requirements as well. “But in the long run,the world becomes–our industries and our companies become better,”he stated.

Mr. Lilienthal joined Dennis Glass, president and CEO of lifeinsurer Jefferson-Pilot, and Brian O'Hara, president and CEO of XLCapital Ltd, in predicting that the current environment wouldresult in a better industry when the dust settles.

Mr. Glass said, “With respect to Spitzer-type issues, theindustry is going to be better off–unquestionably–to the extentthat any illegal activities have been chilled by virtue of thiskind of exploration.”

“In general, the additional focus on some of the issues that arein the gray areas is a good result,” he added, noting that hiscompany took a very hard look at its policies, procedures andpractices as a result–getting some outside input where necessary.“That's a good thing–to get a higher level of comfort.”

XL's Mr. O'Hara said: “We'll see our [company] through this. Itwill create more transparency. It will create a level playingfield, and I welcome that.”

“Going forward,” he added, “we need to be better atself-policing to make sure among ourselves that we don't allowthese types of practices to go on or to take root.”

“Survey respondents are likely looking past the near-term impacttoward the benefits of better disclosure by chastened insuranceexecutives.”

Steve Dreyer

Managing Director, Standard & Poor's