He said it was up to primary insurers to stop acting like innocent bystanders with no influence over the market, and to start pushing harder for a reasonable accommodation from reinsurers on terrorism coverage.

"Reinsurers are the tail wagging the dog on this issue," said Mr. Serio, during a panel discussion here on the state of the market at this weekend's annual meeting of the Professional Insurance Agents of New Jersey and New York, which was moderated by this reporter.

"The traditional market is moving towards being the odd man out," he said. "They are not pushing back on reinsurers, which are calling all the shots."

Mr. Serio said he was skeptical that any amount of regulatory capitulation on terrorism exclusions would be enough to satisfy reinsurers. He added that he was concerned that even if reinsurers were somehow enticed to reenter the market by approving exclusions, "in the end, what would be left in terms of coverage?"

While emphasizing that "this is by no means a paternalistic insurance department trying to tell the business what's good for them," he said it was the department's job not to let insurers off the hook without first assuring that an honest effort has been made to provide reasonable coverage at an affordable price.

In refusing to grant a blanket terrorism exclusion, he said, "we are challenging the industry to come up with another way to cover the risk."

At the same time, he added, he was not neglecting his department's duty to assure that carriers are around to pay claims. "We haven't lost sight of the fact that we have to balance affordability and availability of coverage with solvency concerns," he said, emphasizing that the key word is "balance."

Insurers attending the PIA conference were skeptical about the superintendent's admonishments, but none were willing to dismiss his assertions on the record.

Declining to be quoted by name, one insurer contacted after the panel discussion said that Mr. Serio's challenge to put pressure on reinsurers to provide coverage is easier said than done. A second insurer said that even if coverage is made available, the cost would probably be prohibitive.

Mr. Serio noted that New York is revisiting its captive law and might allow more group captives in an effort to offer insurance buyers an alternative market for terrorism coverage, where it "may be easier to shape programs to satisfy reinsurers."

He added that Congressional passage of a bill establishing a federal terrorism insurance backup would go a long way to alleviating the availability crisis.

"Whether you call it national security or economic good sense, there is a point where the insurance industry's responsibility ends and where the government's responsibility begins, especially when you are talking about a man-made event," he said.