The company said that its loss principally reflects the impairment of fixed maturity investment holdings, adding that the net income impact would be partially mitigated by net realized gains arising from unrelated investment portfolio actions.

Separately, Hamilton, Bermuda-based ACE Limited said exposures arising from directors and officers liability, financial guaranty, and investments, would have no material impact on future operating results or book value.

While several European life insurers announced their holdings in WorldCom securities earlier this week, among U.S. p-c insurers, only Travelers Property-Casualty in Hartford and Birmingham, Ala.-based medical malpractice insurers, ProAssurance Corporation publicly disclosed their holdings.

Travelers Property Casualty said it holds $83.4 million in WorldCom debt and ProAssurance put its bond holdings at $4.7 million. Both insurers said that their exposures were not material to operating earnings.

Speaking more generally about the U.S. p-c industry's exposure, Robert Hartwig, senior vice president and chief economist for the Insurance Information Institute, said it is principally on the investment side, adding that unlike the Enron situation, he did not believe there was any exposure to surety losses.

While there will be directors and officers liability loss exposure for some insurers as well, "there are [coverage] issues with respect to the most egregious violations of public trust," he said. "There is at least the appearance of wrongdoing," he said, noting that if an insurer can show that an insured deliberately misrepresented itself, that would be grounds for suspending or deferring D&O claims' payments.

WorldCom is a widely held company with institutional shareholders among its investors, he said, noting that insurers rank as the fourth-largest group of institutional investors.

But "any individual insurer's exposure to WorldCom is going to be small relative to its total asset base," said Mr. Hartwig, adding that he didn't believe that WorldCom investments posed a threat to the solvency of any insurer.

Matt Mosher, group vice president, property-casualty for A.M. Best in Old-wick, N.J., said Best is in the process of identifying individual U.S. insurer investments and distinguishing between the direct and indirect impact of WorldCom on the industry.

Mr. Mosher said he believed actual investments in the company would not have an impact on the industry's overall capitalization, but the indirect impact of further market declines could depress industry capital in the second quarter.