One of Bermuda?s newest insurers anticipates the current investigation into insurance practices by New York Attorney General Elliot Spitzer will create a level playing field for insurers as well their clients.

Tobey Russ, president and chief executive of Quanta Capital Holdings, said yesterday during the company?s earnings call that the industry entered a very pivotal period after Mr. Spitzer accused broker Marsh & McLennan Cos. of rigging bids and fixing prices based on which insurers paid the highest fees.

Mr. Russ said that the investigation of placement serve agreements and market service agreements uncovered practices that ?we believe have existed in this industry for many years?.

His Bermuda holding company which provides speciality insurance, reinsurance, risk assessment and risk consulting products and services through its subsidiaries only formed in May last year and did not commence its insurance business until the fourth quarter of 2003.

Mr. Russ said yesterday that as a new company Quanta ?reluctantly entered into volume driven agreements with both Marsh and AON based on assurances of adequate disclosure to clients.?

Quanta paid approximately $30,000 as a result of those agreements and has established an accrual for $1 million.

Mr. Russ declined to comment specifically on the exact lines and percentages Marsh and Aon provided to his company, but said: ?In the areas in which we did business, Marsh and Aon have about 70 percent of the total marketplace so it?s considerable.?

Mr. Russ says the investigations into the practices of the major insurers and insurance brokerages will have a profound impact on the industry.

?It is much more important and far reaching than the natural catastrophes we endured during the third quarter,? he said. ?Even though we do not speculate on the outcome, ultimately the industry will be more transparent.?

Mr. Russ says that transparency will have a positive impact in terms of pricing as well as creating a more level playing for companies ?like Quanta that are new to marketplace and don?t have longstanding relationships or agreements in place to either protect or to help us achieve new business targets.?

On Tuesday, his company reported a third quarter net loss of $37.4 million or 66 cents per share last night due to the four hurricanes that hit the Southeast United States during the period.

This compares to a net income of $1.8 million, or 3 cents per share, for the second quarter of 2004. Net loss excluding net realised gains on investments for the third quarter of 2004 was $37.7 million or $0.66 per share.

Looking ahead to the fourth quarter, Quanta expects its European speciality lines to commence underwriting business.

The company is also in the midst of completing due diligence on the establishment of a Lloyd?s syndicate that would serve and support its European speciality lines strategy.

?Lloyds is the largest speciality market in the world and a Quanta syndicate at Lloyds would provide greater access to distribution, highly rated insurance paper and access to market for Quanta,? Mr. Russ said.