The Federal Bureau of Investigation backtracked last week on earlier statements that it was conducting a broad investigation into the insurance industry based on the findings of probes launched by New York Attorney General Eliot Spitzer.

At the same time, the National Association of Insurance Commissioners said its role in the FBI's examination is routine.

In a statement to National Underwriter, FBI spokesman Joe Paris clarified earlier statements about the bureau's probe into the industry and American International Group, stating: “We're not 'investigating' anyone.”

Mr. Paris said Chris Swecker, assistant director of the FBI's criminal investigation division, was “widely misquoted” in articles in the daily press, and in fact the bureau is only taking a “proactive look” at aspects of the insurance industry.

Published reports also said that FBI investigators were working with the NAIC in the bureau's probe of widespread problems in the industry.

Diane Koken, president of the NAIC and Pennsylvania's insurance commissioner, said in a statement that state insurance regulators, working through the NAIC, “have been tapped by the FBI to provide guidance in understanding the technical requirements for accounting and reporting of reinsurance transactions, including arrangements that limit a reinsurer's risk of loss.

“We understand the FBI is seeking to determine whether the accounting practices recently identified represent an industrywide concern,” she added. “Several states are currently pursuing a number of investigations in this area and have been reconsidering existing financial reporting standards since last December.”

Ms. Koken said the NAIC “routinely provides technical assistance to state and federal law enforcement agencies, as well as state and federal regulators in insurance-related investigations. It is widely understood that investigations and examinations of insurer activity are treated as confidential.”

Addressing the FBI's interest in the industry, Robert E. Vagley, president of the American Insurance Association, said that “any time an individual breaks the law, they should be punished accordingly.”

However, he added, investigators need to be reminded there are “hundreds of thousands of individuals who work diligently and honestly every day to serve the needs of policyholders. It would be grossly unfair to tar these hard-working individuals with a broad brush based on the isolated actions of a few bad actors.”

He added that “the business of insurance is based on good faith and trust. We and our member companies are committed to upholding those principles every day.”

The FBI says a top official was “widely misquoted” about a wide-ranging probe of industry practices.