"We're finding these types of actions in other lines of business as well," said Mr. Spitzer, adding that these acts create a "distorted incentive" for sales that drive premiums up.

Specifically, he said there have been instances in which agents dealing in personal lines have been offered stock or stock options by an insurance company, or even a loan, without requiring repayment depending on the agent's sales.

Mr. Garamendi said that as a result of his department's investigations thus far, "we have reason to believe this spills over into employee benefits."

Mr. Garamendi told the panel that his department has been in communication with Mr. Spitzer and regulators in New York, and that he expected that others would join the effort until there were 50 state attorneys general and 50 insurance commissioners examining the practices of the industry relating to benefits for brokers.

In a conference call with reporters after the hearing, Mr. Garamendi referred to Mr. Spitzer as "one of the most aggressive, if not the most aggressive, attorneys general in the country," especially in dealing with financial issues. Mr. Garamendi added that he imagines he has a similar reputation among insurance commissioners.

He said that the California Department of Insurance began investigating brokerage fees and commission agreements in min-February, roughly the same time as Mr. Spitzer's office.

Both acted, he said, after receiving a letter of complaint from a Washington, D.C. based law group. Mr. Garamendi's plan to rapidly file suit against brokers was delayed by questions concerning which code to use in filing the action and a ballot initiative to change that part of California's law.

However, he said that the investigation is continuing and that lawsuits will be filed in California "very soon." Additionally, Mr. Garamendi said that investigators will likely turn their investigative eye to all parts of the industry.

"I would suspect that before the final chapter in this investigation is written, all lines, brokerages and perhaps even agents will be subject to scrutiny," he said.

Mr. Garamendi cautioned that the investigation should be viewed in the long term, noting that there are "many pages to go before the final chapter."

As for the end result of the probe, Mr. Garamendi said that, "the final chapter I would like to see written is that the insurance industry is not driven by greed, but by high ethical standards," in terms of ensuring that consumers are matched with appropriate insurance products at appropriate prices.