Mr. Maher heads one of 15 ELANY Stamping Offices in the country. The offices are a quasi-regulatory operation the state's have permitted surplus lines associations to set up to review excess and surplus lines placements, and to collect taxes and other fees.

"You have to ask, have you put your own pecuniary interest ahead of your clients?" said Mr. Maher, addressing producers during a morning education session to update brokers on New York state legislation and regulations.

If the producers' files show that they have acted in the client's best interest, there are no concerns, he continued. But making sure that the data accurately reflects this is what brokers need to focus on, he said.

The major question for the producers, coming out of the suit filed by New York's Attorney General Eliot Spitzer against Marsh & McLennan Companies, is did the producer steer contracts to carriers to maximize their commissions, he said.

Mr. Spitzer's action alleged that MMC's Marsh Inc. brokerage operation rigged bids and inflated prices with insurers who rewarded the firm with kickbacks disguised as fees and commission agreements?in exchange for having unwitting clients sent their way.

Mr. Maher said brokers need to make sure they keep documentation in place to demonstrate the insurance placement was made because it was in the best interest of the client, either for reasons of price, terms and conditions or the carrier's financial strength.

For the group of brokers present, he noted, one thing that should not concern them is allegations of leveraging. Mr. Maher said the smaller wholesalers, who deal with small and middle market commercial clients, lack the clout to leverage placements that the large brokers, allegedly Marsh, were able to demand.

A major problem, he said, in Mr. Spitzer's investigation, is that he and those outside of the insurance industry, are not distinguishing between profit sharing contingency fees and the Placement Service Agreements and Market Services Agreements Marsh is accused of manipulating to the detriment of its clients.

He said Mr. Spitzer and other investigators do not understand the "nuance" of the commission fee arrangements, "painting broad strokes in the suit," by lumping PSA and MSA agreements with profit sharing contingency fees.

"They have not been differentiated and they should be," he said.

However, he noted, "It will be difficult for the agent and broker community to defend itself until the dust settles."

Changes will come to the industry, he said, but what form the changes will take are only conjecture at this point. He said the insurance community does need to look carefully at proposals and get ahead of the wave of change by making its own recommendations to find "workable solutions."

It is time for a "reality check" for the producer community, he observed, saying that wholesaler brokers need to remember that their regulatory duty is not to the carrier or the retail agent, but the insured in the placement of insurance.

He also advised producers to publish operational guidelines for retail producers to read or to be posted on their Web sites.

Robert Pastel, PIWA legislative representative and an attorney with Pastel & Rosen, LLP, in Albany, N.Y., who also spoke, said one piece of legislation wholesale producers may expect to see is dual licensing disclosure.

Wholesalers, who generally do not think twice about this now, will have to advise retail agents of when they are acting in the interest of the carrier, as a managing general agent, and when they are acting as a broker working for an agent. Mr. Pastel and Mr. Maher noted that wholesalers switch hats as they seek to fill the agent's request.