CEO and President of Axis Capital John Charman yesterday called on shareholders to take a more active role in the companies in which they hold stock.

During his company?s fourth quarter and year end earnings call, Mr. Charman took time out to address the probes into market practices being conducted the New York Attorney General and other state regulators.

He said: ?The easily achievable stability in the marketplace is only threatened by the continuing fundamental disconnect between shareholders, their CEOS and the underwriting businesses.

?Shareholders need to be more demanding of management. The embedded smoke and mirror practices of the industry need to continue to reform and the pace needs to accelerate.?

Axis Capital?s US holding company previously disclosed that it had received subpoenas from the NY AG?s office seeking information regarding incentive commission agreements, bid rigging, fictitious and inflated quotes and conditioning direct insurance on the placement of reinsurance and related matters.

The company?s US insurance arms have also received subpoenas and requests for information from various state insurance regulators regarding these same matters.

Mr. Charman said the company continues to co-operate fully with the investigations. It has also arranged for outside counsel to conduct an internal examination of issues raised by the investigation. Yesterday Mr. Charman described that investigation as ?exhaustive?.

Outside council has now received completed questionnaires from approximately 230 persons representing well over half of Axis Capitals entire staff including ?all those who touched the underwriting process at Axis worldwide including all underwriters, underwriting assistants, and senior personnel in the claims, operations, finance legal and human resources departments?.

Approximately 70 persons including CFO Andrew Cook and Mr. Charman as well as all senior underwriting staff in the company?s US insurance operations were also individually interviewed by outside council.

?The investigation has now moved onto a review of e-mails across the entire employee base worldwide.

Mr. Charman said: ?I?m happy to report that to date our internal investigation has uncovered no evidence indicating that we have engaged in bid rigging, fictitious or inflated quotes, conditioning of direct insurance on the placement of reinsurance or related matters.?

The company expects that the final phase of its internal investigation will conclude by the end of the first quarter of 2005.

Mr. Charman also spoke to the fact that the business practices of both brokerage firms and risk bearing entities ?whose entire business purpose is maintaining the confidence of their customers? have been called into question.

He said: ?In the case of the certain brokerage firms, confidence in the advising services provided by them as fiduciaries has been severely effected.

?Insurance and reinsurance, financial security, willingness to respond and ethical operating procedures have also been strongly questioned. We believe this industry?s [future will lie in eradicating all potential conflicts of interest not merely disclosing them.?

Axis has ?deliberately? chosen to outsource acquisition of its portfolio business to the broker channel and Mr. Charman said a vast majority of the company?s business was and will continue to be driven through that channel.

He said: ?We believe the broker network has the appropriate information expertise and infrastructure not only to provide quality advice to its clients but also to provide critical service to its clients and the insurance industry overall.?

Mr. Charman went onto say that in order to ?help achieve the elimination of potential conflicts and appropriate compensation for brokers, we believe that brokerage firms overtime should solely receive commissions from their clients?.

He said: ?We will work diligently with brokers and regulators to transition to meaningfully improved and completely transparent industry standards.?

The company announced in its last conference call on third quarter earnings that it ceased entering into and suspended making payments under incentive commission arrangements.

Mr. Charman said yesterday however that both the outcome of regulatory guidance and the future structure of producer compensation remain still uncertain today. He concluded: ?Legal, regulatory and contractual certainty is broadly lacking with respect to payments for 2004. We are in the course of reviewing the recent settlement between the New York Attorney General and Marsh and its implications for Axis as well as the rest of the industry.

?Given the high level of uncertainty surrounding the estimation of our liability under those arrangements we have continued to accrue amounts due under incentive arrangements in the fourth quarter.?