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December 8th, 2004

"NY Attorney General subpoenas five insurers for records on legal malpractice"

New York Attorney General Eliot Spitzer has opened a probe on legal malpractice insurance. His latest inquiry is a new area of an investigation that began with accusations of bid rigging and kickbacks among insurers and brokers.

Spitzer''s inquiry includes five insurers, CNA Financial Corp., General Electric Co.''s Employers Reinsurance Corp., Hartford Financial Services Group Inc., American Financial Group Inc. and Arch Capital Group Inc. All five insurers have said they received subpoenas related to legal malpractice insurance since Friday, but they declined to comment on specifics of the requests.

Spitzer''s office interviewed class action attorneys about difficulties they had getting malpractice insurance as part of his probe of collusion in the insurance industry. The chief economist for the industry sponsored Insurance Information Institute in New York, Robert Hartwig, said there is nothing inappropriate about insurers backing off from policies covering class action lawyers due to increased risks.

Fred Isquith, president of the National Association of Shareholder and Consumer Attorneys, as well as others, say insurers may be seeking retribution against class-action lawyers, whom they blame for driving up the cost of litigation claims.