The House of Representatives has passed a bill establishing a loan program in the event of a catastrophic occurrence resulting from a terror attack that includes tort reform.

The Senate has yet to act, but there is discussion about introducing a bill that would provide a coverage formula involving loans and insurance protection in the event of a major loss. Senate discussion is continuing on whether or not to include tort reform.

Mr. Lawson said he understands the Republican dominated House attitude toward tort reform, but wished they had picked some other legislative vehicle to make the issue with. Because of the overriding need to get a reinsurance program in place, he said Congress should "park it on the side" and take it up as a separate agenda at a different point in time.

Increasingly, Mr. Lawson said, the lack of reinsurance is contributing to dramatic increases in premiums.

He predicted more insurance lines will become unavailable in the markets and the situation will only worsen unless Congress resolves the issue.

He said lawmakers are increasingly coming to understand the importance of reinsurance in relation to the economic dynamics of the country. Mr. Lawson added that he is becoming increasingly hopeful Congress will come up with a solution.

Mr. Lawson's comments came during the Downer Grove, Ill.-based Alliance's 80^th annual meeting, which concludes here tomorrow.

The lack of reinsurance will also sustain the hard market well past where it was going prior to 9/11, when insurers were working to bring themselves back to competitive rating, he said.

Lawson said state regulators must continue their work to create an efficient system of "world class" regulations that will reduce the burden of insurers trying to do profitable business throughout the country.

"An efficient regulatory system reduces the regulatory burden on insurers, and reducing the regulatory burden allows costs to be reduced," Mr. Lawson said.

In other comments related to tort reform, Mr. Lawson noted that the best efforts of state legislators in that direction have been frustrated by state Supreme Courts that have struck down reform measures. Eventually, Mr. Lawson predicted, the issue may need to be resolved at the federal level.

Two other issues of importance to the industry are insurers use of credit records to rate insurance risks and mold damage claims, he said.

Those who worry about the use of credit scoring need to understand that it is not the only tool used in underwriting, but one of many tools, Mr. Lawson said. Critics also fail to understand that it is not an anti-consumer measure, but can in fact prove to be an advantage to some consumers, providing them with lower rates in some cases.

The explosion of mold claims is a huge problem facing insures, Mr. Lawson said, and needs some real scientific research, possibly from the National Institute of Health or some other federal entity, to clear up the health implications of mold and educate the public.

As for the current and future state of the AAI, Mr. Lawson said that its company membership of 338 members continues to be strong and is growing by an additional 18 more.

He said other companies continue to look at membership in the association.