Mr. Mills' fundraising activities had been reported in The New York Times last week.

Mr. Quinn said the governor indicated that he expects Mr. Mills and any other member of his administration to cease such actions.

He said the governor has received clear indication from Mr. Mills that he has stopped the practice.

Mr. Mills, a former state assemblyman who created a fund during an unsuccessful run for U.S. Senate, was continuing to take campaign contributions into his campaign fund. The contributions, totaling $15,000 last year, were from individuals not doing business with the insurance department.

The fund currently stands at $38,000.

The money was spent on cell phone bills, meals, flowers, political donations, gifts for volunteers, and a monthly payment of $588.55 for a Chrysler 300 that Mr. Mills said was only used for political functions.

Assemblyman Alexander B. “Pete” Grannis, D-Manhattan, who is chairman of the Assembly Committee on Insurance, called the practice “totally inappropriate, but it is something that is between the governor and Mr. Mills.”

He commended Gov. Pataki for “laying down the law” in criticizing Mr. Mills, but said the entire issue has broader implications for state officials. He said the legislature will begin working on legislation to end such practices in the future.

“I take some comfort that he did not take funds from anyone in the industry, but the appearance is so atrocious,” said Mr. Grannis. “Anyone who holds such a position should not ask or accept contributions. There is too much risk involved and the appearance looks very, very bad.”

Mr. Grannis said he felt that those who contributed to Mr. Mills' fund were looking for influence later on should the superintendent as expected stage a run for a state Senate seat.

Mr. Mills defended his actions, saying that the money was spent primarily on campaign contributions to support Republican causes.

He said he has an extensive travel schedule on the weekends and if he used his state vehicle for those purposes he would be roundly criticized for its use. He does have a personal vehicle that he said is used primarily by his wife on the weekends.

Mr. Mills said he did not solicit or actively pursue any funds and the money came from well-established donors who collected the funds on his behalf without his knowledge.

The practice of state officials using their campaign funds for political purposes is nothing new, he added.

“It's perfectly legal,” said Mr. Mills, who plans to continue the spending but said he has stopped accepting contributions while superintendent.

“The Board of Elections has ruled time and time again that this is perfectly appropriate. It will be up to the legislature to change the campaign laws in New York State,” he said.