The probe into insurance industry practices could be the ?death knell? for initial public offerings in the insurance sector, in particular for Bermuda-based Allied World Assurance Co. according to a New York Post story on Wednesday.

AWAC was among a group of insurers to set up in Bermuda at the end of 2001 in response to a shortage of capacity after the September 11 terrorist attacks, but while most of the so-called Class of 2001 are already public companies, AWAC has remained private.

The New York Post?s Richard Wilner now says Attorney General Eliot Spitzer?s investigation has ?put a crimp in Goldman Sachs Capital Partners? plan to ring up a quick profit on a $225 million investment? in AWAC.?

He wrote: ?When Goldman ponied up $225 million for a 14.7 percent stake in the insurer in November 2001, it told investors it was looking at cashing in on its position in two to three years, a source familiar with the deal said. That?s a much quicker turnaround than normal for Goldman investments, but insurance industry investments in 2001 were opportunistic.?

Mr. Wilner pointed to Axis Capital Holdings which went public in July 2003 backed by Marsh & McLennan Cos. and Endurance Speciality Holdings which went public in February 2003 funded in part with cash from Aon. While both of these companies saw gross premiums soar, Mr. Wilner says the ?post 9/11 window on insurance industry IPOs has seemed to close.?

?Industry sources said IPOs in the sector work best in times of falling interest rates,? he wrote. Wednesday?s increase by The Federal Reserve was the latest in a string to reverse years of interest rate cuts.

?But the death knell for IPOs in the insurance sector is the looming probe by the New York State Attorney,? Mr. Wilner wrote. ?AWAC has not received subpoenas from Spitzer and has not been named in court filings. But with such a wide-ranging investigation underway, it would be difficult to interest investors in such an unknown future. This was not the case in November 2001 when AIG Inc., Chubb, Goldman, Swiss Re and Thomas H. Lee combined to form AWAC.?

Goldman declined to speak with Mr. Wilner on the AWAC investment and AWAC president and CEO Scott Carmilani refused to comment on the New York Post story to , but in July this year his predecessor Michael Morrison spoke to this newspaper on the subject.

Mr. Morrison said then that there were no plans at the present time to go public. But he added that AWAC was different from many of the other companies in the so-called ?Class of 2001? as they were primarily an insurer, while others, at least initially had focused on reinsurance.

As for whether an IPO is in the pipeline, Mr. Morrison said some of AWAC?s Bermuda peers had gone public almost as soon as they set up.

He added that his personal view was that ?you have to build something before you sell it.?