Leading broker Aon Corporation announced on Friday that it had sold off its stake in Bermuda-based Endurance Specialty after conflict of interest concerns were raised by New York Attorney General Eliot Spitzer.

Aon was one of Endurance?s initial investors, joining with Zurich Financial Services to capitalise the post-September 11 start-up with $1.2 billion.

In total, Aon sold 9.8 million shares at a net realised price of $32.70 per share resulting in proceeds of $320.5 million. Aon said it would retain 4.1 million stock purchase warrants.

In a Press statement, Aon chairman and CEO Patrick Ryan said: ?We are very proud to have participated in the founding of Endurance in December 2001, at a time when the insurance industry needed additional capacity.

?The additional capacity created by the establishment of Endurance and other insurers during that period has contributed to the present easing of property/casualty insurance premium pricing.?

Endurance, in a separate Press statement, said that Aon Corporation had sold the shares and that Aon was to receive all of the net proceeds from the sale.

The potential for conflict comes from the brokers not only being invested in the company, but also getting revenue by acting as the company?s broker. ?This sets the stage for conflicts of interest, steering and self-dealing in insurance and reinsurance markets that we are just beginning to understand,? CBS MarketWatch reported Mr. Spitzer as testifying to the Senate Committee on Governmental Affairs.

Endurance has said in previous filings with the US Securities and Exchange Commission that Aon, the world?s second largest broker after Marsh, was its primary reinsurance broker.

?It is possible that certain brokers and intermediaries that compete with Aon will perceive a conflict of interest in our relationships with Aon,? Endurance said in a 2002 filing.

Aon was not the only broker to invest in the so-called ?Class of 2001? ? a wave of companies that set up on the Island in response to a capacity crunch after the September 11 terrorist attacks ? with Marsh, through its private equity unit, having invested in AXIS Capital.

Michael Cherkasky, Marsh & McLennan?s new chief executive, told CBS MarketWatch this week that the firm was considering the future of its private equity unit and its relationship to Bermuda insurers.

He declined to comment further.