New York Attorney General Eliot Spitzer said yesterday that his current probe of insurance industry practices would ultimately lead to charges being brought against more senior executives in the industry.

He also reiterated his concern that insurers based in offshore locations, including Bermuda, are outside New York state?s regulatory reach.

Mr. Spitzer?s comments to the media yesterday followed a hearing convened by the New York State Assembly Insurance Committee to investigate the oversight of insurance licensees and to determine the need for enforcement and legislative remedies.

His nine-month investigation into insurance industry practices has among other things led to a civil suit against Marsh & McLennan, charging the world?s largest brokerage firm of price-fixing exercises and offering payoffs in return for business. Bermuda-based ACE, American International Group (AIG), Hartford and Munich-American Risk Partners are named as participants in the suit, but not defendants.

The investigation has however led to a number of insurers being subpoenaed for information. They include Bermuda-based XL, Axis Capital, Endurance and ACE.

Last week, Susan Rivera, the head of ACE?s largest US operations ? ACE USA and ACE INA Holdings ? resigned without giving a reason, but suspicions are that her sudden departure was linked to her alleged knowledge of bid-rigging between an ACE unit and Marsh, but did not stop it.

Late last year, two employees who worked in the Philadelphia unit under her - president of ACE Casualty Risk Geoffrey Gregory and Patricia Abrams - were fired. Ms Abrahms is one of six mid-level executives, with the others from American International Group, Zurich American Insurance Co. and Marsh Inc., who have pleaded guilty to a criminal fraud charges in connection with Mr. Spitzer?s investigation.

Mr. Spitzer said all six are cooperating with investigators as the probe?s reach continues to stretch.

?These criminal cases will permit us to make criminal cases and bring criminal actions against more senior executives within the companies,? Spitzer said. ?We are moving forward very aggressively with criminal cases against individuals and will pursue those as far up within the structure of these companies as we possibly can,? he said.

Mr. Spitzer told the New York lawmakers yesterday that his probe would eventually touch on bid-rigging across the insurance industry ranging from casualty and life to medical malpractice and aviation.

Mr. Spitzer told reporters that he expects the probe to have a definite impact on the industry.

?There will be disclosures. I think that it will change the way business is done,? he said. ?These contingent commission fees and the lack of transparency have inured to the detriment of individuals who have paid premiums that were higher then they would otherwise have been.?

Yesterday, Marsh & McLennan announced that it was creating the position of chief compliance officer and named E. Scott Gilbert to the post. Mr. Gilbert formerly was the chief compliance counsel at General Electric Co.

Mr. Spitzer also told state and US lawmakers that new rules should be considered to improve regulators? ability to gather information from these companies.

Congress ?should examine the international impact of vertical integration that we?re seeing,? he said. ?This shifting of control to offshore entities that have an impact on our domestic insurance markets? is something that should be studied.

Mr. Spitzer recently announced he would seek election as governor of New York next year, but he insists his office?s insurance and

other investigations would continue.