Debra Korta, legislative program manager for Connecticut's insurance department, speaking for Ms. Cogswell, said the commissioner's remarks about the issue were made at the Independent Insurance Agents of Connecticut's annual meeting in Southington, Conn.

“She conveyed a concern that they could anticipate Connecticut legislation in light of the [brokerage and insurer] settlement agreements she had read,” said Ms. Korta.

State investigations nationwide of insurers and brokers have led to charges of bid-rigging and steering of commercial insurance customers in exchange for bonus fees and commissions tied to the volume of business delivered. A number of companies, as part of settlements to end the probes, have agreed to halt the payment of contingent commissions and support legislation to outlaw them.

Ms. Korta said the department was not drafting any legislation, but noted that Ms. Cogswell was anticipating “what might occur in the [Connecticut] legislature.”

Commissioner Cogswell's comments reverberated nationwide, touching off expressions of concern and anger by an independent agent group as far west as California. Her remarks were “a shot heard across the country,” said the Western Insurance Agents Association in Sacramento.

“We warned the insurance carriers who were engaged in settlement discussions with attorneys general in various states not to force law-abiding agents and brokers to pay for their sins and the sins of large Wall Street brokers,” said Michael D'Arelli, vice president of legislative and regulatory affairs for WIAA.

He noted that ACE Ltd., American International Group, St. Paul Travelers and Zurich America had entered into settlement agreements with various state attorneys general, which require them to work with legislatures and regulators to abolish contingent compensation.

Connecticut is one of the states that settled with some of the insurers, “so it is no surprise that rumors of legislation are circulating there,” WIAA said.

Mr. D'Arelli said his group had warned insurance carriers “that their settlement agreements were tantamount to throwing their own agents and brokers under the bus, but we similarly warned the large Wall Street brokers who had the audacity to question the legitimacy of contingent compensation arrangements.”

Earlier this year, Mr. D'Arelli had slammed national brokerages for suggesting that all producers be forced to give up contingency fees after Marsh, Aon, Gallagher and Willis swore off such deals following the bid-rigging probes.

He commented that for the past couple of years, “WIAA has voiced its concern that insurance companies and Wall Street brokers were more concerned with saving their own skin through settlement agreements than protecting the legitimate use of profit sharing and contingent compensation arrangements.”

“Reports of coming legislation to abolish contingent compensation should remind agents and brokers on Main Street to continue to play by the rules, to not break the law, and to always do the right thing for the client,” WIAA said.

“The bad behavior of a few bad apples doesn't mean we're all rotten to the core,” said Mr. D'Arelli. “WIAA will join other independent agent and broker trade associations to continue to protect the legitimate use of profit sharing and contingent compensation arrangements.”