EDMONTON, Alberta—The New Democratic Party in Alberta is challenging the provincial government's selection of Aon Consulting Canada to study the feasibility of introducing private health insurance.

"Here we have an American-based corporation that sells health insurance products in Canada studying whether we should be selling more insurance products here," said a spokeswoman for the New Democratic Party. "We don't think there's anything in the contract that says they can't later on profit from the system that they've had a hand in designing."

Current Alberta law bars the use of private insurance to fund basic health care expenses. However, other provinces allow the use of some private insurance to pay for medically necessary services.

The controversy was sparked by a statement by Alberta Health Minister Iris Evans that she was unaware that the contract had been awarded to a consultant whose parent company, Aon Corp. of Chicago, had paid out $190 million to settle a fraud case brought by authorities in three U.S. states, including New York Attorney General Eliot Spitzer. In the statement, the minister said that she was "shocked" when the news of the settlement was presented to her.

But NDP leaders scoffed at her surprise, saying it took just minutes searching the Internet to learn of Aon's legal woes in the United States. "We have a research department of precisely two people, and we found this stuff in about five minutes," the spokeswoman said.

In response to the growing controversy, Aon Consulting Canada issued a statement confirming its commitment to the $1.5 million Canadian ($1.26 million) Alberta Health and Wellness contract it was awarded last week. The Canadian unit also asserts that it was not involved in the probe that resulted in the U.S. settlement.

"We do have an agenda, and that is to give Albertans what they have asked for—improved access and greater choice in health care," said Minister Evans in a statement published on the Alberta Health and Wellness Web site. She added that the study is meant to facilitate that discussion.

"We also want this information campaign to help Albertans understand that if we are going to have a public health care system capable of delivering high quality services in the future, they must understand the cost pressures that our system faces today," she said.