A regulatory push to better police the state insurance market following a string of national scandals sent independent insurance brokers and agents into a tizzy last week.

A six-page document circulated by the South Carolina Department of Insurance simply went way too far, say the 1,100 or so recipients of the probing questionnaire. The document included inquiries about commission structures, whether the agents and brokers have ever been sued and who their clients were over the past five years.

Those in the industry see such queries as onerous and intrusive. Regulators counter that they are necessary in light of mounting evidence of industry-wide malfeasance. That said, the two sides are showing signs of ironing out their differences.

The effort was aimed at shedding some light on the murky world of insurance brokering, which essentially amounts to shopping around to find the best coverage for a client. This mainly occurs when there's no standard policy to insure, say, a special project or piece of property.

Brokers find out from insurance companies how much money they want to use to underwrite the risks for a given policy, and relay the information back to their clients.

Problems have surfaced, however, showing signs of collusion among brokers and insurers at the expense of clients.

Late last year, big-time insurance brokers were caught rigging bids to tilt business toward favored companies. Most notably, the world's No. 1 insurance broker, Marsh & McLennan Cos., was said to have received so-called "contingent commissions" for arranging deals that made it a lot of money, but also drove up clients' costs of doing business.

Traditionally, such fees are "contingent" on factors like profitability and recurring business, and are paid in addition to the standard commissions based on a percentage of premiums.

Many in the industry have come to see such commission deals as shadowy and nothing more than kickbacks. Some have voluntarily dropped them in wake of the well-publicized controversy.

The Greenville school system was caught up in the Marsh affair and was mentioned repeatedly in a civil lawsuit filed by New York Attorney General Eliot Spitzer against the company.

Marsh was supposed to find companies with the best rates to insure the school district's $968 million building and renovation project, but instead submitted a sham bid that was artificially high to give the appearance of competition, according to Spitzer's lawsuit.

Court papers also claim that Marsh tried to squeeze a contingent commission agreement out of an insurance company in exchange for steering business its way.

Gwen Fuller McGriff, the state insurance department's deputy director, said her office was merely trying to survey the industry landscape to help make sure this doesn't happen again.

"Our whole intent was to see what can be done to protect the consumer," McGriff said. "At the same time, we don't want to put an undue burden on insurance companies. So we are looking to strike an appropriate balance."

McGriff said the documents were a boilerplate approach put together by the National Association of Insurance Commissioners, made up of insurance commissioners from around the country. The NAIC sent the same template to every state as a guideline on what to ask.

Following the uproar, McGriff's department has decided to send out a second letter that shortcuts the process for most insurers. Agents or brokers willing to sign affidavits attesting that they had nothing to do with Marsh or are unaware of any type of bid-rigging can disregard the first set of documents.

Rep. Bob Walker, R-Spartanburg, says that's a good idea. Also an independent insurance agent, Walker questioned regulators from the start.

"What do I know about Marsh? I never had anything to do with them," Walker said. "And they (the insurance department) want to know all this? I am not required to divulge what commissions I make. It's like asking how much you make for your salary. This goes beyond statute. It's too much."

Walker's sentiment is shared by many agents and brokers in the state, who say the initial approach was way off base because none of them have anything to do with setting up bids. That, they say, is the turf of the big boys for big projects.

Even a big state wholesaler and broker like Charleston-based Johnson & Johnson says it shops around to look for the right fit for its clients, typically agents like Walker, but never uses bids to determine which insurance package it selects.