The key feature of the final agreement is a cost-sharing program that applies to all commercial property-casualty companies.

Insurance companies would be responsible for paying claims equal to seven percent of their written premium from the previous calendar year. That amount would increase to 10 percent in the second year and 15 percent in the third year.

For losses above those percentages, the federal government would cover 90 percent, and the insurance company 10 percent, subject to a recoupment schedule.

Specifically, the Treasury Secretary will be required to recoup the difference between total industry costs (that is, insurance company losses up to the deductible plus the 10 percent co-pay) and specified fixed-dollar amounts--$10 billion in the first year, $12.5 billion in the second year, and $15 billion in the third year.

The recoupment would be done through a surcharge on commercial policies, provided that the surcharge not exceed 3 percent of the premium paid for a policy in a given year.

Losses under the program would be capped at $100 billion. Above that amount, Congress would have to determine what to do next.

All commercial p-c companies are required to participate in the program and to offer terrorism insurance to all policyholders.

Insurers must also disclose the premiums they charge for the terrorism coverage and the existence of the federal backstop.

Municipalities and others involved in self-insurance arrangements may participate in the program at the discretion of the Treasury secretary.

In addition to terrorism losses, the program would also cover workers' compensation losses for acts of war.

While the program is designed to last three years, the third year is at the discretion of the Treasury secretary.

As for group life insurance, the Treasury secretary is required to issue a report to Congress on availability. Based on this report, the secretary has discretion to allow group life to participate.

Turning to state regulation, the agreement requires states to allow rate and form changes to take place immediately. However, states retain full authority to disapprove any rates or forms that violate state law.

Finally, on the hotly contested issue of tort reform, the agreement focuses on procedural reforms.

The agreement creates an exclusive federal cause of action for all lawsuits involving property loss, personal injury or death arising from a terrorist event.

All the claims would be consolidated into a single Federal district court. However, the claims would be adjudicated based on the tort law of the state where a terrorist event occurs.

The federal government, in its role as reinsurer, would not be responsible for punitive damages.

Check "Hot News" from the NU Online News Service at www.NationalUnderwriter.com throughout the day for further developments.