Bermuda-based insurer AXIS Capital yesterday said its US holding company had been subpoenaed by New York attorney general Eliot Spitzer, who is seeking information on incentive payments made to insurance brokers.

AXIS is the latest company to be targeted by Mr. Spitzer as part of his industry-wide investigation into commissions going to brokers when they place business for insurers.

In a Press statement issued yesterday, AXIS president and CEO John Charman said he was "more than happy to fully cooperate with this inquiry".

The company also filed an 8-K ? which is classified as a report of an unscheduled material event ? with the US Securities and Exchange Commission (SEC).

Mr. Spitzer's spokesman, Brad Maione, would not comment on details of the subpoena on AXIS or say how many insurers were being looked at by the AG's office.

Investors did not react negatively to the news that AXIS was being drawn into the investigation.

Mr. Spitzer's probe first focused on brokers ? giants March & McLennan, Aon and Willis were subpoenaed in April ? and later moved on to the insurers themselves, including large health insurers Aetna, Cigna Corp. and giant life insurer MetLife being subpoenaed in June.

AXIS is so far the only Bermuda-based company to have come under Mr. Spitzer's microscope.

Mr. Spitzer launched his latest probe ? having turned the heat on the investment industry last year ? after a February 2004 letter from legal and public policy think tank, Washington Legal Foundation, urging regulators in New York and California to investigate broker commission agreements.

Critics of the long-standing compensation practice between insurers and brokers say contingent commissions ? the common way that insurers reward brokers for placing business with them ? create a situation where the client's best interest may not be the top consideration.

Earlier in the year, Marsh & McLennan senior advisor John Sinnott ? a 40-year veteran of the industry, having started with Marsh in 1963, said at Bermuda-held World Insurance Forum that he saw no conflict in brokers being compensated by the insurers they place business with in spite of the primary mandate being to represent the best interest of buyers.

A parallel investigation into whether insurance buyers are aware of exactly how their broker is compensated has been launched by Connecticut attorney general Richard Blumenthal.

Meanwhile, a canvas by the leading risk manager group ? the Risk and Insurance Management Society Inc. (RIMS) ? revealed last week that its 8,000 strong membership was in favour of brokers reporting the commissions they are getting paid by insurers.

Risk managers are responsible for buying insurance for the risks of the corporation they work for.

Some risk managers have gone so far as to say they would not be adverse to paying brokers directly for their services, rather than the current system where the middle-man is compensated by the insurer.

RIMS president Nancy Chambers said: "RIMS has always advocated for an open and honest dialogue between brokers and risk managers. "Undisclosed contingent commissions have the potential to compromise the very basis upon which this relationship is built," she said.

Estimates have said that, on average, insurer/broker compensation agreements account for about 20 percent of the profits that brokerage firms post.

AXIS shares moved up 40 cents to $24.27 in trading on the New York Stock Exchange yesterday.