Rep. Oxley added that he believes any plan should be transitional rather than permanent. While there may be a lack of reinsurance today, he said, reinsurers will return.

He noted an old saying that the reinsurance industry is driven by two forces, fear and greed. After the Sept. 11 attacks, Rep. Oxley said, fear drove reinsurers away from the U.S. market.

However, he said, the U.S. is the largest market in the world, and it doesn't make sense for reinsurers to take a pass on this market. Greed, Rep. Oxley said, will drive reinsurers back.

But Maurice R. Greenberg, chairman of New York-based AIG, challenged Rep. Oxley's comments.

How long will terrorism be a threat, he asked? No one can say that it will be one year or two years, Mr. Greenberg said. The battle against terrorism is continuous.

Moreover, he said, the insurance industry needs reinsurance, not loans. The industry is willing to pay premiums for reinsurance, Mr. Greenberg said, but there must be a reinsurer of last resort, and this is a proper role for government.

In addition, Mr. Greenberg said, he does not agree that reinsurers will come back to the U.S. market at the same level as before.

European companies, he said, face substantial losses from the summer floods that devastated much of central Europe. And because of the structure of their portfolios, European companies suffered more than U.S. companies from the decline in the stock market, Mr. Greenberg said.

The insurance industry is not looking for a bailout, he emphasized. But the fact is that insurance companies cannot handle certain losses, he said. If terrorists attack a nuclear facility, Mr. Greenberg said, the resulting losses would be beyond the financial capacity of the industry.

"I'm not going to bet the company on a single event," Mr. Greenberg said. "The company has been in business for 80 years. I'm not going to preside over its demise."

And a loan program, he said, will not solve the problem. Mr. Greenberg said that financial rating agencies would treat the loans as a contingent liability.

State insurance departments, he said, would then limit the amount of business insurance companies could write.

Mr. Greenberg added that the payback provision in the House bill, H.R. 3210, is obscure. Under H.R. 3210, insurance companies could pass through the cost of the loans to commercial policyholders.

But Mr. Greenberg said that an insurance company cannot chase a policyholder that moves to another company.

The industry, he said, is united in opposing a loan program.

Rep. Oxley responded that he and Mr. Greenberg have different constituents. Mr. Greenberg's constituents are his shareholders, Rep. Oxley said. Rep. Oxley said his own constituents are taxpayers.

Every member of Congress has that constituency, he said, and members have an obligation to them.

Rep. Oxley said, however, that he has made clear that he is willing to negotiate in good faith with the Senate. The Senate passed legislation, S. 2600, that calls for a quota share program, with the federal government paying up to 90 percent of insured losses with no payback provision.

Between what the Senate passed and what the House passed there is common ground, Rep. Oxley said. He is confident, he said, that Congress will pass legislation before adjournment, possibly before the end of this month.

But he also staked out a strong position on another controversial issue, tort reform.

Rep. Oxley said that while he approaches the tort issue in the spirit of compromise, he will not sign off on a bill that opens U.S. business owners and building owners up to legal attacks immediately after they suffered through a terrorist attack.

In particular, Rep. Oxley said, he does not believe that President Bush intends to sign a bill that allows trial lawyers to recover punitive damages from American businesses after a terrorist attack.

Mr. Greenberg also blasted those who want to subject American victims of a terrorist attack to punitive damages. It is "un-American," Mr. Greenberg said, for one citizen to sue another for punitive damages after an attack.

"It is hard to rationalize intellectually," he said.