Because the ISO terrorism exclusion for commercial lines policies is triggered by a terrorist act causing $25 million in insured damage, Mr. Serio said it would exclude virtually every building in lower Manhattan. "I am not ready to say [to insurers], 'you can walk away from this exposure,'" he said.

Mr. Serio said his department is "telling companies they can propose alternative, targeted language that addresses specific concerns, and the department will take a look," said Mr. Serio. However, he added that by instituting the ISO approach, "the industry has dumped [the exposure] back on the commercial property holder."

Last month, after several weeks of negotiations, the National Association of Insurance Commissioners voted to accept the ISO language as the standard exclusionary wording, subject to approval on a state-by-state basis. Mr. Serio voted in the negative.

A representative for Mr. Serio, Joanna Rose, said today that in addition to ISO's proposal, the department has received "a little over 50" requests for exclusions so far from large and small companies, and none have been approved. She said the department wants the companies to provide more definition concerning the exclusions and more information about specific risks.

When the insurers provide more information with their submissions, they will be reexamined, Ms. Rose said. The department might approve some exclusions, "but we aren't there yet," she noted.

At a recent legislative hearing, in response to a question, Mr. Serio said that among the options he would consider was expanding the use of the New York Property Insurance Underwriting Association, which administers New York's Fair Access to Insurance Requirements, FAIR Plan pool to include commercial coverage.

Property insurers in the state are required to participate in the pool and share in the operating losses.

In addition to New York, California has rejected the ISO terrorism exclusion language.

A representative for New York-based ISO, Dave Dasgupta, said that as of today regulators in 36 states as well as Washington, D.C., and Puerto Rico have approved the policy language.

Besides the $25 million exclusion, the policy excludes any incident that leaves 50 or more persons dead or injured.

How insurers will react to Mr. Serio?s stance is hard to gauge at this point, according to John Cucci, Alliance of American Insurers regional vice president in New York.

"It's too early. Companies are renewing and looking at policies on a case-by-case basis," he said.

Insurers, according to Mr. Cucci, have been getting indications from Mr. Serio's office that the department "would probably approve something less than ISO [proposed], if anything."

Insurers are being asked to pinpoint their terrorism concerns as to specific areas, he said. He noted that 28 filings from 50 insurers to exclude losses from anthrax-related death and illness had been rejected.