Ernst Csiszar, president of the Property Casualty Insurers Association of America in Des Plaines, Ill., went after Mr. Spitzer here during remarks to the American Association of Managing General Agents' annual meeting.

“The reality is that [Mr.] Spitzer did find practices in the industry that are deplorable, but he has taken it further,” said Mr. Csiszar, who left his post last year as South Carolina's insurance regulator and resigned as president of the National Association of Insurance Commissioners to take over PCI.

Mr. Spitzer's continuing investigation has led to 10 guilty pleas by commercial brokerage and insurance executives who are awaiting sentencing for activities related to improper steering of customers, bid-rigging, price-fixing and hidden payoffs to brokers in the form of contingency commissions.

The nation's three largest brokers–Marsh, Aon and Willis–have agreed to repay more than $1 billion to clients who may have been injured by the misdeeds.

A large focus of the probe of late has been on American International Group and finite reinsurance deals that may have been misused to bolster its balance sheet. AIG is also being audited for possibly shortchanging New York's Workers' Compensation Fund by millions of dollars by mischaracterizing premium payments.

Mr. Csiszar complained that Mr. Spitzer's investigations should result in the prosecution of the guilty, and that should be the end of it. However, according to Mr. Csiszar, the New York attorney general has pushed the probe beyond criminal review and is now conducting a sham trial through the media.

“This is corporate terrorism–using the threat of indictment,” he said. “There is no due process and he is ravaging the industry.”

Mr. Csiszar's attack also raised questions about Mr. Spitzer's motives for continuing the probe into insurance industry practices.

“He should look for his own conflict of interest,” said Mr. Csiszar, noting that Mr. Spitzer is a Democratic candidate for governor in New York and suggesting that he might one day aim to run for president of the United States.

“What punishment is there for that?” he said, noting that Mr. Spitzer has stated on television that targets of his probe are guilty before presenting all of the evidence against them and securing an indictment, let alone holding a trial where they could defend themselves.

“This smacks of McCarthyism,” he suggested, referring to the late U.S. Senator Joseph McCarthy, whose activities in the 1950s exposing people he accused of Communist activity made his name a synonym for unsubstantiated media attacks that blackened personal reputations without evidence or trial.

His comments came during an ethics seminar for wholesalers. A representative for Mr. Spitzer said he had no comment about Mr. Csiszar's remarks.

Mr. Csiszar spoke during a panel discussion that included Florida's chief financial officer, Tom Gallagher, whose department includes the regulation of insurance, and Gordon Breslin, senior property underwriter with ACE European Group in London.

For his part, Mr. Gallagher said that Florida's department of insurance and its attorney general had no choice but to react to Mr. Spitzer's probe. However, he appeared to cast doubt over whether the state's investigation would result in finding any wrongdoing.

He said his probe has proven expensive for the industry, adding that his state would not have begun an investigation of its own if it were not for New York's action.

He said one result will be greater transparency for the industry, noting that measures designed to assure full disclosure should pass during this year's session of the Florida legislature.

Mr. Breslin said there is no doubt that the more egregious practices that were unearthed by Mr. Spitzer “should be eradicated.” However, he added, any reform “is just a question of how strong the regulations need to be.”

The London markets have not experienced the extreme reactions the United States has seen, noted Mr. Breslin. He pointed out that the United Kingdom's regulatory agency–the Financial Services Association–has not shown an inclination to make the same inquiries.

On another issue, Mr. Csiszar said Congress must pass an extension of the Terrorism Risk Insurance Act because the insurance industry cannot absorb a tremendous loss from another terrorism attack. However, passage will depend on the industry coming up with some longer-term solution that will include the private sector, he added.

“We need a good-faith effort on the part of the industry to accomplish this,” he said.

Quotebox for Csiszar mug:

“This is corporate terrorism–using the threat of indictment. There is no due process and he is ravaging the industry.”

Ernst Csiszar, President, PCI

Caption over mug of Spitzer:

PCI's president said Eliot Spitzer's penchant for declaring people guilty before trial, or even an indictment, “smacks of McCarthyism.” Mr. Spitzer had no comment about Mr. Csiszar's remarks.

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Mr. Spitzer's behavior, says Mr. Csiszar, reminds him of Sen. Joseph McCarthy, who in the 1950s communist witch hunts accused people of crimes without evidence or trial.