NU Online News Service, June 25, 12:20 p.m.EDT

WASHINGTON–House and Senate negotiators added at thelast moment a tax on large financial institutions, includinginsurers, before completing work early today on sweeping financialservices legislation.

Several insurance trade groups immediately voiced concern aboutthe new levy.

The tax would be imposed on large financial services companiesfor five years, in order to pay the estimated $19 billion cost ofthe bill, H.R. 4173.

Legislators are aiming to complete work on the legislation andhave it to President Obama by July 2.

The tax provision will impact insurers with assets undermanagement of more than $50 billion.

Federal regulators will assess the fee, with higher fees to beassessed on companies with the riskiest assets.

The conferees agreed to establish the Systemic Risk Council tocollect the $19 billion assessment over five years. However, sincethe actual cost of the bill may run higher the authority to levyadditional assessments will remain for 25 years. After that time,any funds remaining in the fund will be used to pay down thefederal deficit.

According to insurance industry officials who monitored theprocess throughout the night, the tax will be in addition to anestimated 17 basis point fee over 10 years that the Obamaadministration seeks to impose on large institutions over 10years.

That fee is designed to help pay the cost of the Troubled AssetRelief Program, and is being considered by the House Ways and MeansCommittee and the Senate Finance Committee.

Leigh Ann Pusey, president and CEO of the American InsuranceAssociation (AIA), said, with regard to the 'pay-for' assessmentsprovision that was passed early this morning, AIA remains opposedto any legislation that subjects the insurance industry topre-funding obligations.

"Given the importance of these reforms, AIA will remain activeto ensure that the unique nature of insurance is preserved throughthe bill's final passage and into its implementation," shesaid.

Jimi Grande, senior vice president of federal and politicalaffairs at the National Association of Mutual Insurance Companies,added, "Although the legislation appropriately provides somerecognition that the higher the level of risk associated with acompany the more they should be assessed, raising funds to pay forthis huge piece of legislation based on an arbitrary threshold ofhow much a firm has in assets is simply unfair."

He said that any fee "should be based entirely on activities andnot assets."