The defendants were identified as Joshua Bewlay, 39, of Tuxedo Park, N.Y. who formerly worked at Marsh as managing director of the concern's New York excess casualty unit for global broking. The AIG employees who pleaded were underwriter Carlos Coello, 33, of Teaneck, N.J. and John Mohs, 33, a vice president living in Manhattan. Both worked for the excess casualty division of American Home Assurance Company.

AIG said Mr. Coello and Mr. Mohs were employed at a subsidiary that provides high-limit excess liability coverage to businesses, and were subordinates of two other AIG employees who pled guilty last October. All four AIG employees are on paid leave.

All three who entered pleas today admitted to participating in a scheme that saw Marsh, the nation's largest broker, submitting phony quotes to commercial insurance customers so that participating insurers could keep existing clients' business without worrying about competition.

Mr. Spitzer's office has charged that the brokerage's bid-rigging activity was done for payoffs from the insurance companies.

Mr. Bewlay in a statement made with his plea said it was "Marsh protocol" to prevent clients from learning how much placement money they were getting from carriers "in addition to any fee or commission paid."

He said the protocol required "multiple layers of inquiry to discourage the client from obtaining an answer." When clients did get an answer, Management Service Agreement revenues were "significantly understated," according to Mr. Bewlay.

Mr. Bewlay and Mr. Mohs pleaded guilty in Manhattan's New York County Supreme Court to one felony count each of scheme to defraud punishable by up to four years in prison. Mr. Coello pleaded guilty to a misdemeanor count of scheme to defraud punishable by up to one year in jai.

All three appeared before Justice James Yates who deferred sentencing, which he said would depend on the amount of their cooperation with prosecutors.

Mr. Spitzer's office said the three are expected to testify in future cases, as are the six other insurance industry employees who have entered criminal pleas. Besides two executives at AIG, two from Zurich American, one from Marsh and one from ACE have pled guilty to criminal charges.

Mr. Spitzer thanked the New York State Insurance Department for its cooperation in the joint investigation, which is continuing and last Wednesday saw his office subpoena AIG for information concerning the sale of non-traditional insurance products, which according to authorities have been used in the past as devices to give a distorted picture of company finances.

Since October, when Mr. Spitzer's office filed a civil suit against Marsh's parent, Marsh and McLennan Companies charging violations of state anti-trust law, the company's Chief Executive Officer Jeffrey Greenberg resigned and the firm stopped accepting incentive payments and agreed to pay an $850 million settlement to reimburse customers.