NEW YORK (Reuters) ? Marsh & McLennan Cos., the world?s largest insurance broker, said yesterday it would reform its business practices and stop accepting fees that New York?s attorney general said amounted to bid-rigging.

The changes were announced one day after chairman and chief executive Jeffrey Greenberg resigned under pressure and Marsh learned it would not face criminal prosecution by the attorney general, Eliot Spitzer (pictured). It still faces civil charges.

Marsh also created a compliance unit to oversee brokers and said it would fully disclose commissions and fees to clients.

Spitzer accused New York-based Marsh in an October 14 lawsuit of rigging bids and colluding with American International Group Inc. and other insurers to fix prices. A spokesman said Spitzer might still prosecute individual Marsh employees.

Michael Cherkasky, Marsh?s new CEO, said the company will by January 1 permanently ban ?contingent compensation? fees that insurers pay to brokers in exchange for more business. Those fees in 2003 totalled $845 million, or 7 percent of Marsh?s $11.6 billion of revenue.

?Marsh dodged a bullet by avoiding criminal charges, but economically the company is not out of the woods,? said David Havens, a fixed-income research analyst at UBS AG.

Cherkasky, once Spitzer?s boss as the New York County district attorney?s investigations chief, pledged on a conference call to work with the attorney general to settle the civil lawsuit, though no meetings are scheduled. Spitzer had said he would not negotiate with Greenberg.

Cherkasky said he believes ?very, very, very few? clients suffered from price-fixing, and he said he would work with Spitzer to determine ?appropriate restitution.?

He also said ?there have been suspensions at Marsh, and there has been a firing,? and others involved in wrongdoing will not stay with the company. He said Marsh plans to complete an internal review this year.

?This is going to be a tough period for us but, net-net, good,? said Cherkasky, who still runs Marsh?s risk and insurance services unit.

Spitzer has expanded his probe to life and medical insurers, and may sue Marsh rival Aon Corp. over its business practices, an official in his office said.

A spokesman for Chicago-based Aon said the company is working with Spitzer to address any concerns.

Shares of insurers and brokers surged after the threat of criminal charges against Marsh was removed. New York-based AIG, the world?s largest insurer by market value, is run by Jeffrey Greenberg?s father, Maurice ?Hank? Greenberg.

?The big fear was that Marsh would be criminally charged, and that AIG could perhaps be next in line,? said Wayne Bopp, an analyst for Fifth Third Investment Advisors in Cincinnati. ?You?re taking the death sentence off the table for the brokers, and that?s just huge.?

Marsh shares rose $2.45, or 9.3 percent, to $28.87 in New York Stock Exchange trade on Tuesday. Aon rose $1.90, or 9.7 percent, to $21.54. AIG rose $4.23, or 7.5 percent, to $60.33.

Marsh?s global compliance division will report to Cherkasky and the audit committee of the company?s board of directors.

Other changes include submission of quarterly compliance reports, ethics training for employees, and creation of an internal compliance and ethics ?hotline.?

Marsh postponed releasing third-quarter results to November 9 from October 27.

Cherkasky said morale has declined at Marsh, whose declining stock price has cut into many employees? retirement holdings. Marsh shares have dropped 37 percent since Spitzer announced his probe.

?There is a lot of anger and unhappiness, but we as a management team are going to deal with (it),? Cherkasky said.

Havens of UBS said Marsh will face ?an unpleasant adaptation to a lower revenue environment, and it will happen quickly.? He downgraded Marsh bonds to ?hold? from ?tactical buy? after they rallied upon Greenberg?s resignation.