Mr. Spitzer could not be reached for comment before this edition went to press.

Mr. Mills, outlining the reorganization of his agency during a panel discussion here, assured his audience he is not trying to construct another roadblock for insurers with his latest initiative. He described his activity as a move to take back a part of the department's job that was usurped by Mr. Spitzer over the past few years.

Describing New York's latest housekeeping initiative, he related he is often asked, "Who is, in fact, the regulator" in New York. Mr. Mills said he has been trying to "reclaim the role of regulator" during his year on the job.

Mr. Spitzer's probes of the industry were commenced while the insurance department was managed by Mr. Mills' predecessor, Gregory Serio, who had also been appointed by Republican Gov. George Pataki.

"It's fair to say that the attorney general had jumped into [a] breach" in the system, with his investigations of bid-rigging and finite reinsurance transactions, he said.

"There were some bad things going on," he conceded, adding that the department needed to change internally to handle such issues. He explained that unlike Mr. Spitzer's office, his department previously did not have resources to conduct probes, such as attorneys with financial transaction investigatory experience.

Attorneys at the insurance department are civil servants, he said. "We don't have the ability to lock them in a room and [let them go] through boxes and boxes of files," like the attorney general does.

He added that during department exams of New York carriers, "we're looking at data that is five years old"--not in "real time" as the attorney general's office did.

To rectify these problems, the department established a corporate practices unit that's "up and running," staffed with attorneys that have experience in reviewing complex financial transactions who will work with department examiners.

Mr. Mills stressed that the department is not "trying to come up with another 'gotcha'-type of agency [that will] zealously look for wrongdoing."

He said that when Marsh & McLennan Companies was investigated by the attorney general, it became a public spectacle, with mainstream media erroneously equating bid-rigging with contingent commissions and the entire industry given a black eye. Such investigations, he said, should be performed "surgically--not in a public fashion."

"If criminal wrongdoing is found, we'll work with the attorney general. That's the way it should work," he added.

At several sessions here, insurance executives bemoaned the roadblocks and costs of the U.S. regulatory system, pointing to better models adopted by Europeans in which each country accepts the regulatory authority of a home domicile regulator.

Mr. Mills, participating on a separate panel of regulators, said he also thinks an international system of mutual recognition works best for a global economy. However, before joining the debate on global regulatory standards, Mr. Mills said U.S. regulators have to get their house in order. He said the politics of the U.S. system, in which 16 commissioners are elected, would be a stumbling block to an international system of mutual recognition.

"Before I could even hope to touch upon what [others are] trying to address about what's possible globally, I need to address what's possible at home in the states," he said, noting that states have to move to a system of greater uniformity.

He also said that while he's no fan of creating a federal entity to regulate insurance, he hasn't raised his voice in opposition to the proposed federal SMART (State Modernization and Regulatory Transparency) Act, which would impose regulatory uniformity.

"I do feel that it's very, very good that Congress is out there with that Sword of Damocles over the U.S. state-based regulatory system, because that will move the states to a better job of uniformity and standardization. Only when we've addressed those issues can we move toward [dealing with] international issues."