WASHINGTON--House Democrats set plans yesterday to vote next week on legislation to extend the federal backstop for terrorism insurance in a move said to be a bid to force the Senate to adopt provisions representatives want.

The clash between chambers comes as the clock tick towards the Dec. 31 expiration of the existing Terrorism Risk Insurance Extension Act.

But the Senate so far has failed to react. Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee--the traffic cop on any legislation extending the Terrorism Risk Insurance Extension Act--declined to respond to the House action.

Congress is currently dealing with a huge backlog of work on must-do issues, and could stay in session until Dec. 21--although it is hopeful that work can be completed before then.

Rep. Barney Frank, D-Mass., yesterday asked the House Rules Committee to clear his compromise bill for floor action and mentioned that the new House bill contains provisions not approved by the Senate.

He said he is seeking a "reasonable compromise" between the House version and a Senate measure that offers less coverage. "We took some of their provisions, and we think some of the provisions in our bill also deserve consideration," Rep. Frank said.

But a spokesman for Sen. Dodd, while noting she is aware of the House action, was unable to secure any comment on the House action from Sen. Dodd or the Senate Banking Committee staff yesterday.

And lobbyists for three property-casualty insurance trade groups--who asked not to be named because of the delicacy of the situation--said the consensus of the industry is "concern."

One explained that the industry believes Sen. Richard Shelby, R-Ala., "has gone as far as he will go on legislation he opposes in principle, and would not hesitate to go home for Christmas fully aware that the current backstop expires Dec. 31 and no one is in a position to extend it."

Under both bills the federal government would provide support for insurers in the event of a major terrorism catastrophe loss.

The revised House bill accepts the Senate approach on budget issues, which calls for an accelerated recoupment from commercial property-casualty insurance policyholders of federal expenditures up to $27 billion. After that, the Secretary of the Treasury would have authority to waive any additional paybacks.

The revised House bill would add group life to insurance lines covered by the act; it creates a separate $5 billion recoupment pool for group life. This is apparently a new wrinkle that would have the effect of reducing the cost of an attack on commercial insurance policyholders, and is an implied sweetener to the Senate and real estate interests.

The compromise package that will be the subject of a House vote next week accepts the Senate 7-year time limit to the bill in place of the 15 year extension originally called for by the House. It drops language in the current House bill adding coverage for nuclear, biological, chemical and radiation events.

But it will demand that the Senate accept the House "reset" provision, which benefits areas which have suffered prior terrorist attacks and reduces the "trigger" for federal involvement to $50 million. The Senate bill has a $100 million trigger.

Besides adding coverage for group life, the new House bill includes a provision, contained in the version, limiting the cases where a life insurer can deny coverage to an applicant based on the applicant's travel plans.

A key player in the new House initiative is Rep. Gary Ackerman, D-N.Y., who represents a New York City district. A spokesman quoted the congressman as saying the goal of the House action is to put pressure on Senate lawmakers to negotiate with the House, especially since the current legislation is so near to expiration.

"The indication we have from them is 'take or leave it' but that's not going to happen," the spokesman for Rep. Ackerman quoted the representative as saying. "We hope that this is sufficient and they accept it, but realistically the clock is running."

Charles M. Chamness, president and chief executive officer of the National Association of Mutual Insurance Companies, said that the trade group is "encouraged" that Rep Frank, who chairs the House Financial Services Committee, is advocating a terrorism insurance backstop program that includes both a lower trigger level and does not include mandatory make-available coverage for weapons of mass destruction (NBCR).

"The continuation of the program is vital to our nation and our markets," Mr. Chamness said. He noted that lowering the trigger level to $50 million--the Senate bill calls for a $100 million trigger--and eliminating the NBCR make available mandate contained in the first House bill will allow medium- and smaller-sized insurers to participate in the program.

"We anticipate the House and Senate will resolve their few remaining differences before the current legislation expires on December 31st, as we know they understand the urgency of adopting a program," Mr. Chamness said.

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