Southampton, Bermuda--New York Insurance Superintendent HowardMills, in an apparent jab at New York Attorney General EliotSpitzer, told an insurance industry conference yesterday he hasformed a unit to examine corporate practices without"politics."

The Republican appointee, speaking at the World Insurance Forumin Bermuda, said insurers should welcome having an insuranceregulator "looking at these issues and handling them, [rather] thanan attorney general, where politics can enter into the mix."

Mr. Spitzer--an elected Democrat whose investigations ofinsurers and brokers has secured billions in settlement moniesafter probes into commercial insurance bid-rigging, contingency feekickbacks, steering and phony accounting of reinsurance deals--isseeking his party's nomination for governor.

Earlier this month, his activity was labeled political byMaurice Greenberg, the former chairman of American InternationalGroup, who is a defendant in a civil fraud action brought by Mr.Spitzer. When his company agreed to pay $1.64 billion to settle thecase, Mr. Greenberg said through a spokesman that "shareholderslose when companies choose to settle investigations motivated bypolitical ambition, fueled by threats and settled out of fear."

Mr. Mills, outlining the reorganization of his agency during apanel discussion here, assured his audience he is not trying toconstruct another roadblock for insurers with his latestinitiative.

The superintendent described his activity as a move to take backa part of the department's job that was usurped by Mr. Spitzer overthe past few years. The industry, he remarked, should prefer tohave insurance regulators perform such investigations in a mannerthat would remove them from the political arena.

Describing New York's latest housekeeping initiative, he relatedthat he is often asked, "Who is, in fact, the regulator" in NewYork. Mr. Mills said he has been trying to "reclaim the role ofregulator" during his year on the job.

Mr. Spitzer's probes of the industry were commenced while theinsurance department was managed by Mr. Mills' predecessor, GregorySerio, who had also been appointed by Republican Gov. GeorgePataki.

"It's fair to say that Attorney General Spitzer had jumped into[a] breach" in the system, with his investigations of brokers andfinite reinsurance transactions, he said.

"There were some bad things going on," he said, adding that thedepartment needed to change internally to pick up these things. Heexplained that unlike Mr. Spitzer's office, the departmentpreviously did not have resources to conduct investigations, suchas attorneys with financial transaction investigatoryexperience.

Attorneys at the insurance department are civil servants, hesaid. "We don't have the ability to lock them in a room and [letthem go] through boxes and boxes of files" like the attorneygeneral does.

In addition, during insurance department examinations ofcompanies in New York, "we're looking at data that is five yearsold," not in "real time" like the attorney general's officewas.

To rectify these problems, the department has set up a corporatepractices unit that's "up and running," staffed with attorneys thathave experience in reviewing complex financial transactions. Theywill work with department examiners, he said.

Mr. Mills stressed that the department is not "trying to come upwith another 'gotcha'-type of agency [that will] zealously look forwrongdoing," adding that the industry should welcome having aninsurance regulator examining such issues instead of an attorneygeneral, where politics could become involved.

Mr. Mills said that when Marsh & McLennan Companies wereinvestigated by the attorney general, it had become a publicspectacle, with mainstream media erroneously equating bid-riggingwith contingent commissions and the entire industry given a blackeye. Such investigations, he said, should be performed "surgically[and] not in a public fashion."

"If criminal wrongdoing is found, we'll work with the attorneygeneral. That's the way it should work," he said.

A spokesman for Mr. Spitzer, Darren Dopp, said by e-mail that hehad no comment on Mr. Mills' remarks.

Speaking about more global regulatory issues, Mr. Millssuggested that the politics of the U.S. system, in which 16commissioners are elected, would be a stumbling block to theinternational system of mutual recognition.

At several sessions during the World Insurance Forum this week,insurance industry executives bemoaned the roadblocks and costs ofthe U.S. system of regulation by 50 states, pointing to bettermodels being adopted by Europeans in which each country accepts theregulatory authority of a home state regulator.

Mr. Mills, participating on a separate panel of regulators, saidhe also thinks an international system of mutual recognition worksbest for a global economy. But before even getting to the point ofbeing able to join their voices to the debate on global regulatorystandards introduced by an earlier panel, Mr. Mills said U.S.regulators have to get their house in order.

"Before I could even hope to touch upon what [others are] tryingto address about what's possible globally, I need to address what'spossible at home in the states," he said, noting that states haveto move to a system of greater uniformity.

He also said that while he's no fan of creating a federal entityto regulate insurance, he hasn't raised his voice in opposition tothe proposed SMART (State Modernization and RegulatoryTransparency) Act, the proposed House legislation to createregulatory uniformity.

"I do feel that it's very, very good that the Congress is outthere with that Sword of Damocles over the U.S. state-basedregulatory system, because that will move the states to a betterjob of uniformity and standardization. Only when we've addressedthose issues can we move toward [dealing with] internationalissues."