I was in the financial services industry, so if you have questions about this story, please contact me.  Email me at brandonstarr@yahoo.com, or use the tagboard if it's short, or maybe the comments (within a few days of this posting; I rarely check comments more than a week back.)

There are three basic ways to buy insurance:

1)  Direct purchase from a carrer (a carrier is what you think of when you think "insurance company"--it's the company that's taking in people's money and pooling the risk).  Spitzer's allegations would have nothing to do with this sort of insurance purchase.

2)  Purchase from an insurance agent--that's a person licensed to sell insurance.  You buy the insurance through them, and pay a commission.  If they're any good, you're paying the agent for their knowledge and service, but they actually represent the insurance carriers.  If they're not good, you get no service from them and the commissions are basically money down the toilet.  Spitzer's allegations would have nothing to do with this means of insurance purchase either, as I understand the charges so far.  However, though they require different licensing, I believe that it is possible for an agent to also be a broker, below.

3)  Purchase from an insurance broker.  This is the flip side of insurance agent:  you go to an insurance broker, and the broker represents you, rather than the insurance carriers.  You are paying them to go out and get bids for your insurance business.  It is their fiduciary duty* to solicit the best bids they can and lay them out for you, along with information on differences between the carriers and their policies.  THIS IS THE KIND OF INSURANCE PURCHASE SPITZER IS MAKING THE CHARGES ABOUT.

What he's saying is, there are brokers all over (he focused on the largest for this round of charges) which are taking money from the carriers to bump their insurance up the list.  In other words, this is as sleazy as it gets in insurance sales--and it's sadly widespread, he alleges.  You go to a broker; you pay money to get insurance bids--and the bids you get back are at least suspect and at most rigged, because they're making at least as much money from the carriers they DON'T represent as they are from you, whom they DO represent.  Ugly, ugly, ugly.

AIG, a big insurance carrier named in the charges, is down over 5% today (later edit:  now about 10%) on the news.  Some of the companies named, I believe, are private companies.  This will be a real earthquake in the world of insurance, believe me.

* If you knew how serious those words are from a legal perspective in the financial services industry, you'd have a shudder going down your spine even now.