(by Mark Riley)

On Tuesday, Spitzer scandal involved new players as the New York Attorney General Eliot Spitzer opened a probe against more insurers.

Now investigation also involves health insurance companies. Shares of health insurers went down on the expected probe. Aetna dropped about 12% to $86.17, Humana’s shares slid over 6% to $18.02.

"It is scaring to death anyone invested in the sector. It intimates that brokerage fees could potentially become transparent to consumers, and that will increase competition. As a result, brokerage fees might decrease. Consumers will benefit, but it will squeeze the companies," said Tim Ghriskey, chief investment officer of Solaris Asset Management.

Last week, Spitzer opened a probe against insurance broker Marsh & McLennan Cos. for rigging bids and inflating client costs.

Spitzer called contingent commissions the ones that failed to help corporate clients in getting the best prices on property and casualty policies.

Amid his investigation, the world’s top insurance group Marsh & McLennan said the contingent commissions were 7% from 2003 total revenue, or $845 million. Marsh & McLennan also said it got as much as $1.2 billion in incentive payments within the past 18 months. Cut of the fees will definitely lead to decreased operating income.