“The contingent commission issue has been painted with a very broad brush, but there are fine strokes here, and fine strokes need to be talked about. Its not acceptable to just come out and say that all contingent commissions should be illegal,” said Mr. Mills, a former New York assemblyman who was the Republican partys sacrificial lamb in last years doomed effort to unseat U.S. Sen. Charles Schumer. “I pledge that I and the department will take a very thoughtful approach to the contingent commission issue.”

Mr. Mills, who has been acting superintendent since January, said that “state legislatures need to look at some of these questions, but you won't see overreactive regulations being promulgated by our department. You will see thoughtful regulations that are appropriately tough when they need to be tough, but they won't be overreactions because thats not good for the consumer and not good for the industry.”

On questionable finite reinsurance deals, Mr. Mills said he hopes to be a “reasonable voice, one that recognizes that we cannot throw out the baby with the bath water. We are not looking to hurt the industry.”

Perhaps Mr. Mills is looking to play the “good cop” to Mr. Spitzers “bad cop” in policing the industry, but given the exposure of blatant misbehavior by insurers and brokers, this was the wrong time to speak softly, leaving others to carry a big stick.

The timing of the speech was also poor because it came on the heels of dramatic mea culpas by Marsh and Aon, as well as days after industry titan Maurice Greenberg stepped down as CEO of AIG in the face of mounting probes and subpoenas. (Indeed, the speech was delivered in the AIG building, adding a stark irony to the talk.)

Mr. Spitzer is running for governor in 2006, meaning insurers and brokers will remain in the spotlight for at least the next two years. Mr. Millsshould he be confirmed by the legislaturewill be under intense scrutiny from Mr. Spitzer and other reformers, as well as from foes of state regulation who say unelected locals cannot be trusted to adequately oversee insurance industry activities.

Until insurers and brokers clean up their act, Mr. Mills needs to practice tough love. The industry must be confronted, not coddled. Times like these call for an aggressive regulatory intervention to restore public confidence, not calming reassurances.

Sam Friedman

Editor-In-Chief

reassurances.”

Reproduced from National Underwriter Edition, March 25, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.