New York Attorney General Eliot Spitzer has filed suit againstinsurance brokerage firm Acordia Inc. in Chicago and its parentcompany, Wells Fargo Bank, for allegedly steering customers toinsurance companies that paid kickbacks for the business.

According to the lawsuit, the practice of steering businessrepresented a significant conflict of interest, placing Acordia'sown financial interests ahead of the well-being of its clients, Mr.Spitzer's office said in a statement.

On its Web site, Acordia describes itself as doing "what isethical and what is right for the customer" and claims that itmakes "insurance placements in the best interest of our customers,"the statement continued.

The attorney general said the lawsuit details how Acordiaallegedly conspired with several insurance companies, known asAcordia's "Millennium Partners," to steer customers to them inexchange for secret payments.

Acordia's top management, including its then-CEO Robert Nevins,is alleged to have actively participated in the Millennium Partnersscheme.

When insurance companies refused to make the improper payments,according to the lawsuit, Acordia's management punished them bysteering customers away from them and toward insurers who did paykickbacks.

Wells Fargo, based in San Francisco, participated directly inAcordia's fraud, the statement continued. In one scheme, WellsFargo agreed to "funnel" its own retail banking clients to Acordiafor advice about insurance coverage. Wells Fargo did so with theunderstanding that Acordia, in turn, would steer this additionalbusiness to The Hartford, an insurance company that paid Acordiafor such steering.

The lawsuit, filed yesterday in State Supreme Court inManhattan, a county-level jurisdiction, seeks restitution for thecompanies' customers, disgorgement of illegal profits andpenalties.

The attorneys general of Connecticut and Illinois filed parallellawsuits yesterday.

In a statement posted on the Wells Fargo Web site, DaveZuercher, president of Acordia, said the firm plans to vigorouslydefend itself against the allegations brought by the attorneysgeneral. He said the company discloses its compensation inaccordance with guidelines set out by the National Association ofInsurance Commissioners.

"Contingent compensation agreements have been a long-standingand well-known practice in the insurance industry, and thesecommissions continue to be paid by insurers to hundreds ofinsurance agents and brokers throughout the country, including NewYork," said Mr. Zuercher in a statement. "These agreements havebeen held by courts to be legal and enforceable."