The New York Attorney General, Eliot Spitzer, has launched an inquiry into insurance brokerage contingent fee practices. The initial target of the investigation was Marsh, which allegedly accepted payoffs for steering business to insurers at inflated prices. Marsh's chairman, Jeffrey Greenberg, resigned, as the company sought to avoid criminal prosecution. A lack of confidence in the outcome of the inquiry has led to a decline in Marsh's earnings, prompting layoffs of as many as 3,000 employees. Spitzer has widened his investigation to include other firms, such as Axis and Aon, and many not yet under investigation are examining their own practices.

Although Spitzer's attention was drawn to the life and health lines, insurers cannot help but wonder where his investigations will lead. They also fear that the publicity will increase public distrust of the industry as a whole, and question the effect that it will have on their legislative goals in the upcoming year.

"It is still impossible to determine the impact that the Spitzer investigation will have on the industry's public policy agenda," said John Lobert, senior vice president, state legislative affairs for the Property Casualty Insurance Association of America. "We are working closely with legislators to make certain that they understand the facts of the case and are not influenced only by the headlines."

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