Mr. Serio said that the state, in looking for answers to the terrorism insurance situation, would review the laws related to captive insurers and other alternative financing mechanisms that can be expanded to small and medium size commercial accounts.

Mr. Serio said the state can no longer wait for Congress' answer to the problem, and that he is appointing a commission in the next two weeks to deal with the problem.

His remarks came during a reception held by the Insurance Brokers of the State of New York.

From New York's perspective, Mr. Serio said, there is a serious reinsurance capacity problem in the marketplace that needs to be solved.

He said the commission would work up a plan to help the insurance industry come up solutions related to the capacity issues stemming from the need for terrorism coverage.

A vote on a federal backstop plan to provide terrorism insurance, if it occurs, is expected in a lame duck session after the Nov. 5 elections, which have the potential to create a shift in power in the Senate where the Democrats hold a one vote majority.

Mr. Serio said it was "very upsetting" that a measure had not been approved, adding, "I fear that after the election, the vote will not get done."

A federal solution would be more helpful, Mr. Serio added, because this issue affects the global economy, in which New York is a principal participant.

Mr. Serio said he fears all of the work done by the industry to win passage of a terrorism backstop bill will go for naught because Congress will not vote on the bill.

He praised the work done by members of the insurance community to help his department educate legislators in Washington, D.C. on the need for terrorism insurance backstop legislation.

Mr. Serio said he believes the hard market will remain for some time to come, and promised that his department would do all it can to respond to the needs of the market.

"At no time in this market has there been more of a need for creativity," Mr. Serio observed, adding that the department will be working with the state's agents and brokers to come up with creative solutions to filling the market's insurance needs.