St. Paul Travelers Subpoenaed Again in N.Y.

New York Attorney General Eliot Spitzer has issued a fourth subpoena to St. Paul Travelers Companies Inc., and officials at the insurance firm said his office is investigating whether they improperly dropped liability coverage for attorneys.

The company received the subpoena on Friday. No charges have been filed.

At least five other insurance companies have received similar subpoenas. Spitzer is expanding his investigation of the industry beyond accusations of bid rigging and kickbacks among insurers and brokers that first surfaced in late October.

The other firms are CNA Financial Corp., General Electric Company’s Employers Reinsurance Corp., Hartford Financial Services Group, American Financial Group Inc. and Arch Capital Group Inc.

Insurance analysts said Spitzer is responding to complaints from attorneys that large insurers have limited malpractice coverage and raised premiums in an effort to limit the number of class-action lawsuits against their clients.

Spitzer’s office has not commented publicly on the subpoenas.

“More lawyers are suing lawyers,” said Robert Hartwig, chief economist for the industry-sponsored Insurance Information Institute in New York. “It’s not as if attorneys have been singled out. The fact is, attorneys have been caught up in the same explosion of litigation that has affected other professional service firms.”

But some legal groups suspect that insurance companies are raising rates and dropping coverage to protect themselves.

Spitzer has interviewed lawyers at several firms that are members of the National Association of Shareholder and Consumer Attorneys in Washington, which represents about 100 law firms that file class-action lawsuits.

Firms in the association began having difficulty renewing their malpractice coverage about two years ago, said the group’s president, Fred Isquith.

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