"These efforts can be done a lot more surgically," he said, referring specifically to probes of bid-rigging and contingency fee abuse at Marsh & McLennan. "They need not be done in so public a manner so as to affect the stock of a public company and cause 5,000 people to lose their jobs."

As for the role that the new five-attorney Corporate Practices Unit will play in looking into alleged industry abuses, Mr. Mills shied away from saying his people would venture into criminal areas. "We are not trying to out-attorney general the attorney general," he said.

The National Association of Mutual Insurance Companies praised Mr. Mills in his efforts to rein in certain aspects of the Spitzer investigations. Robert Detlefsen, NAMIC director of public policy, said that "it speaks well of Mr. Mills that he is more interested in maintaining the overall health of the industry than in grabbing headlines and in preening before television cameras."

Coupled with charges of "corporate terrorism" leveled in May against the attorney general by Ernst Csiszar, president of the Property Casualty Insurers Association of America, it could signal a new willingness of p-c executives to take a more combative stance in defense of the industry's bloodied image.

The attorney general's office was quick to respond. A representative for Mr. Spitzer, Darren Dopp, said Mr. Mills' remarks will cause the attorney general to "re-evaluate the working relationship" with the superintendent. "We think we are at a critical juncture where we are turning the corner and bringing reform to the industry," he said.

Mr. Dopp then raised the issue of Mr. Mills' qualifications for the job he was appointed to in January. "He came on board with some credentials that were in question, at least," he said. "We would like to give him the benefit of the doubt, and we really don't think you need some in-depth experience to do a good job."

Gov. George Pataki appointed the three-term Orange County assemblyman to the insurance post after Mr. Mills gave up his safe seat to take on the seemingly thankless task of running against Democratic U.S. Senator Charles Schumer last fall when figures with higher profiles all declined to run. Sen. Schumer won in a landslide.

Mr. Mills' remarks also come as the 2006 statewide elections approach. The investigations have made Mr. Spitzer a national figure and leading candidate for the Democratic gubernatorial nod for an election in which he could face Mr. Mills' patron, Gov. Pataki.

"You have to wonder if this is all about [politics]," said Mr. Dopp. "After all, this was Mr. Mills' background when he came into office, and we wondered whether or not he could put that aside and concentrate on the responsibilities of his office."

As for the actual impact any so-called "re-evaluation of the relationship" will have on current investigations, Mr. Dopp said it would be virtually nil, since, he contends, the insurance department played such a small role to begin with.

However, he did say that "if these remarks signal some kind of shift where [Mr. Mills] is taking a different view, then there could be problems" in future probes.

Mr. Dopp contrasted what he characterized as the seemingly partisan role Mr. Mills is now assuming with that of his predecessor, Gregory Serio. "When the problem was revealed, [Superintendent] Serio was eager to get to the bottom of it and had an aggressive response," he said.

That is one reason why Mr. Mills' criticism concerns the attorney general's office. "[Mr. Mills] is supposed to be a proponent of the highest business standards and protector of consumers and honest companies who obey the law," Mr. Dopp said. "I would just like to know what investigations he would not have done."

Mr. Serio noted earlier this year that the insurance department had addressed the issue of contingency commissions as early as 1998, but since there was no real outcry against them from corporate buyers, disclosure was seen as the best regulatory route.

"The bottom line is that [the scandals] happened on the insurance department's watch, and when something like that happens, you have to accept responsibility," according to Mr. Dopp. "Having said that, we always understood that they were lied to and duped."

Trying to allocate the responsibility for ferreting out industry abuses between the two departments becomes problematic due to their different roles in the criminal and regulatory realms, which can overlap.

Even Mr. Serio and Mr. Spitzer engaged in a bit of mild one-upmanship at a legislative hearing in January in recalling the history of the evolving insurance probe.

Mr. Spitzer's investigation of the ethically questionable but legal practice of contingency commissions began in April of 2004, but ran out of steam until October when illegal bid-rigging was uncovered–behavior prompted in part by the lure of volume-based bonus commission deals.

The probe then veered into the area of accounting abuses and the misuse of finite reinsurance deals to artificially prop up balance sheets, which resulted in a civil suit filed against American International Group, and which ultimately led to the downfall of company CEO and industry icon Maurice Greenberg. AIG was also named in the bid-rigging probe.

Dueling Quotes with Spitzer and Mills mugs and finger pointing art:

"These efforts can be done a lot more surgically," charged N.Y. Superintendent of Insurance Howard Mills. "They need not be done in so public a manner so as to affect the stock of a public company and cause 5,000 people to lose their jobs."

"You have to wonder if this is all about [politics]," according to a representative for N.Y. Attorney General Eliot Spitzer, pictured above. "After all, this was Mr. Mills' background when he came into office, and we wondered whether or not he could put that aside and concentrate on the responsibilities of his office."

Callout for page 7 column, no mug:

NAMIC said "it speaks well of Mr. Mills that he is more interested in maintaining the overall health of the industry than in grabbing headlines and in preening before television cameras."