An investigation into U.S. insurers and brokers rattled insurance industry stocks for a second day on Friday as investors, shaken further by subpoenas delivered to the top U.S. life insurer, struggled to gauge how deep the probe might reach.

Marsh & McLennan Cos. (MMC), the world's biggest insurance broker, said on Friday it would suspend a controversial practice that is at the heart of the case.

Marsh was sued by New York Attorney General Eliot Spitzer (search) on Thursday for steering unsuspecting clients to certain insurers in exchange for lucrative payoffs.

Under the practice, known as market services agreements or contingent commissions, insurers pay brokers to steer business their way. Though the practice is not illegal when disclosed, Spitzer charged Marsh with collecting the payments by rigging bids and fixing prices that inflated costs for clients.

Marsh's move to end the practice did little to help its shares, which plunged an additional 16 percent on Friday after losing nearly a quarter of their market value, or some $6 billion, on Thursday.

American International Group Inc. (AIG), the biggest U.S. insurance company, which was mentioned in the suit, said on Friday its top executives were not involved in price fixing of insurance products.

MetLife Inc. (MET), the No. 1 U.S. life insurer, said on Friday it had received two subpoenas from Spitzer's office requesting information about how it compensated brokers for life insurance group business tailored for corporations. MetLife said the first of these subpoenas was announced in June and the latest was delivered within recent weeks.

The MetLife announcement appears to show that Spitzer's inquiry goes beyond property and casualty providers.

Spitzer's probe is also likely to lead to a wave of shareholder lawsuits. Individual investors filed separate federal lawsuits against AIG and Marsh & McLennan on Friday. Both cases claim the companies violated their fiduciary duties.

The continued fallout stung several industry stocks for a second day. Marsh & McLennan shares lost $5.65 to $29.20, while AIG shed $2.15 to $57.85 after hitting a new 52-week low of $55.80 earlier in the day.

"It is kind of a black hole right now. We don't know what's involved," said Michael Nix, portfolio manager at Greenwood Capital Associates LLC, who owns insurance shares.

AIG Chief Executive Maurice "Hank" Greenberg said an internal probe found problems only in the property and casualty insurance business of AIG's American Home Assurance subsidiary.

But looking ahead, Greenberg said the probe that surfaced this week may have long-term implications for the industry. The scandal "may bring about some changes in how people are remunerated in property and casualty fields."

Nix said he was not ready to sell his AIG shares because the company has "very strong" assets and earnings potential, but signs of widespread fraud at the company could prompt him to change his mind.

Analysts said they expect other states to launch more investigations, and they see new industry standards being set as a result of the scandal. The Connecticut attorney general's office said on Thursday it was conducting its own investigation, but other states have been silent so far.

"We believe the (property and casualty) insurance industry is undergoing a seismic shift in its business practices," J.P. Morgan Chase & Co. analysts wrote in a research report.

Investors seemed to be thinking the same. On Friday, shares of insurance broker Willis Group Holdings (WSH) fell 2.7 percent to $33.55, while the stock of rival Aon Corp. (AOC) fell 1.4 percent to $21.74.

Hartford Financial Services Group (HIG) shares fell 3.6 percent to $56.30, adding to a decline of 6.1 percent on Thursday.