A spokesman for Heartland, Peter J. McDonough, said the company is chartered in Washington, D.C., its premium is collected there and it is regulated by the Washington Department of Insurance, Securities and Banking.

"Our lawyers have reviewed this [contribution question] and there is frankly no issue," declared Mr. McDonough, who said that a letter had been sent to the New Jersey Department of Insurance and Banking seeking an advisory opinion, which the company expects will support the findings of its attorneys.

Heartland's position was attacked by Assemblyman Neil M. Cohen, D-Union, who is deputy majority leader as well as the chairman of the Assembly Financial Institutions and Insurance Committee.

Mr. Cohen announced he had written Donald Bryant, commissioner of the N.J. Department of Banking and Insurance, asking him to hold a formal investigation and public hearing.

According to Mr. Cohen's reading of the law, the state of license or domicile is irrelevant. "If you are doing business in the state then you are subject to the law," he said.

Mr. Forrester is the owner of Benecard, which, according to Mr. McDonough, manages prescription purchasing and dispensing fees for self-insureds and organization pharmaceutical plans, and also offers fully-funded plans with a fixed limit.

He said Heartland is the captive of two organizations, made up of Benecard clients==Benecard Association Trust and Benecard Association. Mr. McDonough explained that the captive, created in 2003, is managed by the McCarren Ferguson captive management company in Washington and has a locally-based manager. It provides stop-loss insurance for the programs that go over their contract spending limit, he said.

Mr. Cohen, in his letter requesting an investigation, said Benecard operated from Lawrenceville, N.J. as Heartland's general managing agent, offered its product in New Jersey and sold Heartland insurance by bargaining with and securing "official approvals of municipal and county officials in New Jersey for Benecard contracts."

If Heartland is doing business in New Jersey, Mr. Cohen suggested, it is not only violating campaign finance rules, but is also avoiding a 1 percent premium tax amounting to $2 million a year.

Public employees in programs with Heartland backing don't have New Jersey Life and Health Insurance Guaranty Fund support if the "thinly capitalized Heartland" becomes insolvent, he wrote, and suggested that several insurance statutes may be violated if Heartland and Benecard are illegally commingling non-insurance fees with premiums.

A spokeswoman for the N.J. department, Jaimee Gilmartin, said the letter has been referred to the agency's legislative and regulatory affairs unit for a review, and she could not say how long that might take. It would depend, she said, on whether all the necessary information is there to make a finding.

If the N.J. Department of Insurance and Banking should decide to refer the matter to the state attorney general, "we would weigh in," said Lee Moore, a spokesman for the N.J. Department of Law and Public Safety. "So far, there has been no overture to have us formally involved."

News of Mr. Forrester's insurance dealings have come at a time when Sen. Corzine is the focus of stories questioning his dealings with a former girlfriend, Carla Katz, who heads Local 1034 of the Communications Workers of America, which represents New Jersey state workers. Sen. Corzine has acknowledged forgiving a $470,000 loan to her without repayment.

Mr. McDonough suggested that the Democrats questioning of Mr. Forrester's dealings was designed to "take the well-heeled and the high-heeled off the front page."

New Jersey's governorship, has been the target of a vigorous GOP campaign ever since New Jersey Democrat Jim McGreevey resigned as governor after revelations he had cheated on his wife and had a gay affair.

Mr. Cohen conceded that insurance infractions as a topic are unlikely to excite the electorate, but said the Corzine campaign would probably present the issue as one of "illegal campaign contributions."