Spitzer's Victims?

Mr. Spitzer cleaned the clocks of insurance and brokerage firms allegedly committing the serious crimes of bid-rigging and cooking the books. (We must use the word allegedly, because under the settlements, the companies did not admit guilt.)

However, Mr. Spitzers legacy is an entirely different matter.

My associationthe PIAagreed with Mr. Spitzer and others who went after these wrongdoers. Criminal behavior in this industry should not be tolerated at any level.

Unfortunately, he and other regulators jumping on this bandwagon were so busy headline-hunting that they didnt seeor probably even care aboutwhat their actions were doing to the insurance industry.

The real losers in Mr. Spitzers crusade are the nations independent insurance agentsthe honest, law-abiding businesses that made the companies Mr. Spitzer took on rich. So, what did Mr. Spitzer do?

To start with, he took away those evil contingent commissions. His push to prosecute caused insurance regulators to put the squeeze on insurers and independent agents via new disclosure regulations and the loss of legal contingency fees.

Regulators all started screaming for tough new laws, when it was obvious that the tough old laws worked just fine. What was needed was exactly what happened. Someone came along willing to enforce those tough old laws. Enter Eliot Spitzer. The companies committing the crimes were caught. They were punished. Thats the purpose of law.

Now we have tough new laws. If the matter wasnt so serious, it would actually be laughable. As we all know, criminals will skirt the tough new laws just like those companies did with the tough old ones.

Meanwhile, what crimes did independent insurance agents commit? None. Yet without thinking twice, Mr. Spitzer and other regulators took away a big part of our livelihood.

Later they increased the face slap when those same regulators started to relax the contingency commission thumbscrews on some of the allegedly guilty firms.

Apparently justice does not flow downhill. While the companies caught a break, contingencies for independent agents were not restored.

Yes, we agree, the fines these firms paid were huge and they stung the bottom line, but they are large corporations with many resources. Most independent agents losing contingencies do not play in that ballpark. Larger agencies were able to work around the loss of 2 percent, but some smaller agencies could notand faced with that loss of income, they went under.

Who really got hurt by the Eliot Spitzer crusade? Independent agents.

Another outcome of Mr. Spitzers narrowly focused actions was to put insurance under a microscope. We all became criminals in the eyes of the public.

Then along comes Hurricane Katrina, former Mississippi Sen. Trent Lott and lots more trouble. And who got hurt here? Insurance agents who care deeply for their clients, move heaven and earth when catastrophe strikespeople who are really heroes to consumers in a crisis.

Thats the legacy Eliot Spitzer leaves this industry. While the firms Mr. Spitzer took down continue to make billions, the independent agents who are pillars of their communities, whose generosity funds many a charity, whose civic pride leads them to accept leadership positions in their cities and counties, whose employment of thousands of equally honest individuals that contribute much to this nations economy are reviled.

Where is the justice?

Yes, Mr. Spitzer was kind to insurance as a governor. But so what? He and colleagues who leaped at the chance to get those insurance bad guys never defended the little people who take good care of their clients and who work so hard on their behalf.

In their headline-hunting haste, these officials forgot that these mega-brokers do business with the small businesses of this nation. As was stated earlier, we are the people whose hard work made those corporations rich. Were also the people who pay a large share of the taxes that support these crusaders. Were the people who put youEliot Spitzerinto office.

And now fates fickle finger is pointing the other way. Today there are hundreds, maybe thousands of insurance professionals having the last laugh. Eliot the Great has been humbled. Destroyed. His career is over.

Its a shame, and such a waste. Government needs Eliot Spitzers. It needs people who stand firm and consider crime to be crime. We need people who espouse these values and keep them. We need fearless crusaders to take on big corporations and their big-gun lawyers.

But wethe peoplealso need government leaders and regulators with vision beyond the next office they seek. Eliot Spitzer used insurance and other financial institutions to go from attorney general to governor. During his campaign of reform, it doesnt appear that he much cared about who he hurt to get there.

What is really important for the insurance industry and the public is what we learn from the worlds Eliot Spitzers.

Yes, we need crusaders, but we need crusaders to be fair and honest. We need men and women fighting for change to see the world in 360 degrees, and not in such narrow terms.

Crusaders need to know that there are trustworthy people at the point of sale that can be deeply hurt when changes are made to punish people at the top.

What do you folks think? You may comment below.

(Gary Wolcott is director of communications of the Professional Insurance Agents Western Alliance, based in Vancouver, Wash., representing four PIA chaptersOregon/Idaho, Washington/Alaska, Montana and Arizona/California/Nevada and New Mexico. He may be reached at garywolcott@piawest.com.)