"He clearly has not shown any additional need for regulations governing broker fiduciary duties," said Ken Nigohosian, executive director of the American Agents Alliance. "This continued battle is simply an unnecessary drain of taxpayer resources, which the Alliance and our coalition believe is unacceptable."

Michael D'Arelli, vice president, legislative and regulatory affairs for the Western Insurance Agents Association, said the commissioner has also failed to show that he couldn't deal with agents engaged in the misconduct uncovered by Mr. Spitzer.

"If you can identify wrongdoing and establish that you don't have the authority to correct it, then we'll be the first" to support new disclosure rules, Mr. D'Arelli said.

Mr. Williams said the department is confident it will be able to show justification for the new rules. "We certainly believe they're needed," he said. "And we believe we could make a good case for why they're needed to protect consumers."

Mr. D'Arelli said the WIAA intends to challenge the expected new proposal once it is released in California's Office of Administrative law. However, he offered cautious support to statements by the department's general counsel, Gary Cohen, that the state would soon be taking enforcement actions against agents it has found engaged in misconduct. This is what the WIAA has been seeking all along, he said.

"We've asked them to do this," he noted. "If you've got agents doing this, bring them in. We're not going to defend their misconduct."

Mr. Nigohosian called on the agent community to stay united on the issue, saying that the issue isn't one "that only impacts one person or one group; it involves our entire insurance community." As a result, he said, "We must, and I emphasize must, stay together in defeating any onerous and unnecessary regulations and/or legislation."

One group, the Insurance Brokers and Agents of the West, has already issued a proposal of voluntary regulations, but Mr. D'Arelli said the WIAA would not support a voluntary system out of fears that it could become mandatory.

"Why would we ask legislators to work with our coalition to oppose the department's unwarranted and politically motivated attempts to require additional disclosure and then turn around and support voluntary disclosure?" Mr. D'Arelli asked. "Our members would question our motives if we made the noose by which the department or Legislature would hang us."

By doing so, he said, "we would in essence be writing our own regulation, as any so-called 'voluntary' disclosure forms would soon be put on the backs of agents and brokers when adopted as a legislative or regulatory mandate."