John Iten, a credit analyst at the New York-based S&P, said the outlook revision takes note of the "allegations of widespread misconduct" in Mr. Spitzer?s civil suit.

Mr. Iten said this ongoing investigation would result in lower revenues for many insurers because the bid-rigging practices had previously inflated premiums paid by insurance buyers.

He said it is "to be expected that the cessation of this behavior will lead to more competition and lower premium income for insurers, at least in the excess casualty business line." According to S&P, this would further exacerbate the softening in market conditions that has already begun.

S&P said it also believes that insurers would no longer have to pay brokers contingent commissions under market services agreements, as this practice is swiftly being discontinued.

But S&P said the loss in premium income will outweigh any savings on contingent commissions?based on a common-sense assumption that the benefit to these arrangements must have exceeded the cost, or else these insurers wouldn't have been willing to pay these commissions in the first place.

S&P analyst Thomas Upton commented that the potential impact for brokerage companies and the property-casualty sector overall are under intense review at the agency. "The matter of bid rigging has risen very suddenly last week and the implications of these allegations were broad, and the entire matter is a subject of intense review by S&P," Mr. Upton said.

Mr. Upton also commented on S&P's ratings action this week, which involved the lowering of senior debt ratings for two prominent brokerage firms being investigated by Mr. Spitzer.

Yesterday, S&P lowered Marsh & McLennan Cos. senior debt rating to "triple-B-plus" and kept its "CreditWatch Negative." The firm also downgraded Aon's senior debt rating to "triple-B-plus" and put it on "CreditWatch Negative." It also put Willis' "triple-B-minus" senior debt rating on "CreditWatch Negative."

Mr. Upton forecast that at the very least, in the short term, revenues of these brokers will be cut as contingent commissions are either foregone by companies themselves or no longer paid by carriers that they do business with, and the tying arrangements if any are challenged.

He also added that where charges of bid rigging have been brought, they would have at least a reputational cost that would hurt the companies' ability to do business in the future.