The insurance scandal keeps swirling, with

Marsh & McLennan

(MMC) - Get Report

giving Wall Street an idea how much the investigation could cost it as shares of other insurers get hammered in a guilt-by-association feeding frenzy.

Marsh, the leading player in the newest scandal to rock the financial services industry, said the disputed fees at the heart of the investigation generated $845 million in revenue for the firm last year, a little more than originally thought.

The insurance broker released updated numbers late Monday on how much it took in from so-called "contingent fee'' agreements with insurance firms. Last week, New York Attorney General Eliot Spitzer, in filing civil fraud charges against Marsh, said those fees totaled $800 million.

Marsh said last week that it would no longer accept the fees, which it receives from insurers as a reward for steering business to them. Marsh's filing left little doubt that the loss of the contingent fee revenue will have a big impact on the broker's bottom line.

The company said contingent fees, which Marsh calls "market services agreement revenues,'' represented 7% of its total revenue of $11.6 billion. Through the first half of this year, those fees totaled $420 million, also 7% of total revenue.

"The suspension of MSA's will negatively impact near-term operating income,'' Marsh said in the filing.

Shares of Marsh were plunging again Tuesday, falling $2, or 7%, to $23.56. The stock has fallen $23 since Spitzer announced the filing of charges at a press conference last Wednesday.

Marsh's main rival,



, also continues to feel the effects from the scandal, as many believe it's only a matter of time before Spitzer also files charges against that broker. Shares of Aon dropped $2, or 9%, to $19.24 in late morning trading.

In the wake of the scandal, Wall Street analysts have been saying its likely other brokers, such as




Willis Group


, also will have to forgo such payments in the future. The loss of contingent fee revenue will no doubt lead to diminished earnings at insurance brokers in coming years.

Contingent fee deals are common in the insurance industry and brokers have long defended them as being proper. The arrangements allow brokers to be compensated based on the volume of business they direct to an insurer, rather than getting a fee for each specific deal.

Critics, however, contend these agreements create a conflict of interest, since the brokers have a financial interest in selling their customers insurance products from companies they are receiving additional payments from.

Spitzer, similarly, contends such payments are unethical and possibly illegal because they create an incentive for a broker to keep steering new business toward an insurer, even if doing so is not in the interest of the broker's customer.

Spitzer's office also has uncovered evidence of alleged price fixing and bid rigging by Marsh in an attempt to drive up the price of insurance premiums, something that would guarantee it bigger contingent fees from the participating insurers. To date, three insurance company employees have pleaded guilty to charges that they took part in the bid rigging scheme and supplied Marsh with "fictitious" price quotes.

The investigation, meanwhile, continues to keep other insurance firms on the defensive.


(MET) - Get Report

, which previously has disclosed receiving subpoenas from Spitzer's office, said Tuesday it paid out $25 million in contingent fees to brokers in 2003. The nation's biggest life insurer said it's reviewing its payment practices.

The New York-based insurer also said it's "not aware of any instance'' in which a MetLife employee supplied a "fictitious'' price quote to a broker. Last week the insurer said it had received a subpoena from Spitzer's office, seeking information related to the price fixing allegations.

MetLife's stock rose 36 cents, or 1%, to $34.86.

But shares of health insurance firms got battered Tuesday as Spitzer's office makes no secret it is interested in expanding the investigation beyond commercial insurers. The sell-off also was fueled by


(UNM) - Get Report

disclosure that is had received a subpoena from Spitzer seeking information about its price quoting system and compensation deals with brokers.

Some of the hardest hit health insurers were


(HUM) - Get Report

, off $1.79, or 9%, to $17.41;



, down $2, or 6%, to $34.55;



, off $8, or 8%, to $89.60 and



, down $5.60, or 5.7%, to $92.70.

Wellchoice's stock dropped even after it issued a statement last Friday saying it "does not engage in any of the practices cited in the complaint filed by the Attorney General against Marsh."