Here we go again: another corporate conflict-of-interest scandal that, if it’s as big as prosecutors say, is costing all of us.

This time, New York Atty. Gen. Eliot Spitzer is prying open the insurance industry, just as he did with successful investigations of Wall Street analysts and mutual fund companies.

On Oct. 14, he sued the country’s biggest insurance-brokerage firm, Marsh & McLennan Cos., for alleged bid-rigging and kickbacks. The company said it took the allegations “very seriously” and was cooperating with investigators.

“The insurance industry needs to take a long, hard look at itself,” Spitzer said.

“If the practices identified in our suit are as widespread as they appear to be, then the industry’s fundamental business model needs major corrective action and reform.”

As a broker, Marsh promises to find for its corporate clients the most suitable insurance policies at the best price, just as a mortgage broker should find a homebuyer the best loan.

But Spitzer says Marsh instead steered business to favored insurers that paid Marsh kickbacks masquerading under polite terms such as “contingent commissions.” Client companies thus paid more than they would have in an honest, competitive market.

Most astonishing was the scale: In 2003, the suit said, these kickbacks accounted for $800 million of Marsh’s revenue. Those funds flowed straight to the bottom line, accounting for more than half the company’s $1.5 billion in profits, analysts said.

Who were the victims?

l The corporate clients and their shareholders who paid too much for insurance. Eventually, we’ll see whether high costs contributed to budget cutbacks that hurt those companies’ employees as well.

l Marsh’s shareholders. They had every reason to believe they’d bought stock in an honest company. When the charges were revealed, the company’s share price plummeted by 24 percent. By the next day, the loss had grown to nearly 37 percent.

Moreover, Marsh’s thousands of honest employees may find their paychecks and benefits threatened as the company struggles to recover.

l Anyone who invests in stocks. Now, in addition to worrying about Iraq, terrorism, the sluggish economic recovery and election-year uncertainty, we have to worry about a scandal in the massive insurance industry. Falling prices for insurance stocks dragged the Dow Jones industrial average below 10,000 on Oct. 14 for the first time since August, when it hit its lowest point since last November. Even after a small gain on Oct. 15, the Dow remained below 10,000.

While many scandals of the past few years involved the acts of small groups of executives, the suit against Marsh suggests improper practices were ingrained in the company and the insurers that worked with it, and required the cooperation of a large number of people. Hence, it suggests the corporate culture is rotten.

Lack of information

In many cases, the suit claims, cooperative insurers were enlisted as shills, to submit phony bids at high prices in order to make the preferred companies’ bids look like bargains.

Spitzer said his investigators unearthed memos in which Marsh executives exhorted employees to steer business to preferred insurers, openly describing how this would drive up Marsh’s earnings.

Indeed, the suit says insurance brokers and insurers have used contingent commissions for decades.

It’s way too soon to see all the remedies these cases will require, should the allegations be proved. But one thing is clear already: Companies in all industries should be required to provide much more detail in their earnings reports and other filings.

Marsh has long acknowledged in its financial reports that it received contingent commissions, describing them as fees for a variety of legitimate services to insurers, such as helping them develop new products. Spitzer’s suit says this was “false and misleading” because there really were no such services.

In any case, investors, analysts and the company’s customers probably read right past the disclosure of these commissions because Marsh did not reveal how large they were. Had outsiders known that perhaps half the company’s profits came from this source, they might well have demanded more information — possibly forcing the company to clean up its act.

American companies don’t like to disclose too much about their operations. Large companies, for example, typically do not break down the profits earned by their individual subsidiaries. Doing so, many feel, would tell competitors where they are vulnerable.

But they should have to break out those details. In the broader view, it’s good to make companies reveal their weak points. The economy benefits when companies are forced to improve or lose out to competitors who can do better.

It didn’t take an insurance industry scandal to see that inadequate accounting is a problem — almost all the corporate crimes of recent years were made possible by loose rules.

The new investigation is just a reminder of how serious this problem is.