WASHINGTON (Reuters) ? Agents for insurance brokers accepted vacation trips, cheap loans and shares of stock or stock options from insurers in exchange for steering clients their way, New York Attorney General Eliot Spitzer said yesterday.

Spitzer and others at a congressional hearing called for more federal oversight to ensure brokers? agents guide clients to the best and most affordable policies for their needs, not those that provide payoffs for the broker.

In New York, two more insurance executives pleaded guilty to misdemeanours for their roles in insurance bid-rigging schemes.

Spitzer told lawmakers that inducements for brokers? agents were ?structured in many different ways, including loans and offers of stock ... They are not necessarily improper in and of themselves on their face, unless they are not disclosed and they distort behaviour.?

The New York attorney general ? who previously exposed misconduct in the mutual fund and Wall Street analyst businesses ? last month filed a lawsuit against Marsh & McLennan Cos. Inc., the world?s largest insurance broker.

In that action, as in another filed last week against Universal Life Resources, Spitzer has accused insurance brokers of accepting lucrative payoffs in return for steering unsuspecting clients toward certain insurers.

?Steering is wrong. Steering should not be permitted,? Spitzer told the Senate Subcommittee on Financial Management looking into allegations of steering, bid-rigging and other possible abuses in the insurance industry.

In New York, two former employees at insurer Zurich American ? a unit of Switzerland?s Zurich Financial ? pleaded guilty yesterday to misdemeanours related to Spitzer?s investigation. The two, Edward Coughlin and John Keenan, had been facing felony charges, but agreed to cooperate with Spitzer?s ongoing investigation.

Zurich said the two had been suspended, but have now left the company. The insurer, in a statement on its Web site, also said it continues to review its business practices and cooperate with Spitzer?s office and other authorities.

At the hearing, Illinois Republican Sen. Peter Fitzgerald said, ?Congress is increasingly focused on insurance reform.?

Federal involvement may be necessary to set basic standards of accountability in the insurance industry, Spitzer said.

He questioned the industry?s traditional exemption from federal and state antitrust laws.

Although the federal government should not preempt state insurance regulation, Spitzer said there were gaps across 50 states and some regulators had not been aggressive enough.

The trend toward offshore location by insurance companies and their investment practices are also areas where the federal government could have an oversight role, he said.

?From our work in this area, it is clear that the federal government?s hands-off policy with regard to insurance, combined with uneven state-regulation, has not entirely worked,? Spitzer said.

Spitzer said the location of insurance operations in Bermuda and other offshore havens had made state supervision more difficult. He also advocated more investigation of how premiums are set ? what portion goes to paying claims and how much is invested for income.

Fitzgerald questioned whether state regulation of insurance brokers was adequate. He said Congress may consider asking the Federal Trade Commission to study the industry.