Industry sources say they hope to hear within the next 24 hours whether a final agreement can be reached. The word that a deal might be imminent led the Consumer Federation of America to issue a denunciation of what it said would be "a gift" to insurance and real estate interests.

The crux of the dispute between legislators in Congress appears to be whether juries would have any say in the amount of punitive damage awards, or whether it would be up to the judge.

In addition, there is a disagreement over whether the award of punitive damages by the judge would be limited by statutory guidelines.

As for the substance of the legislation, sources said that while there is still no final agreement, a consensus appears to be developing around a three-year program.

Under the program, the insurance industry would retain a percentage of direct written premiums for losses caused by terrorism. The percentages would be 7.5 percent in the first year, 11 percent in the second year, and 15 percent in the third year.

For the first $10 billion in losses, the government would recoup any loans made to the industry by the Treasury Department through a surcharge on commercial policyholder premiums.

Above $10 billion in losses, the Treasury Secretary would have discretion to determine whether to recoup industry assistance.

The Consumer Federation of America charged that the plan would leave taxpayers liable for billions in losses that the insurance industry could afford to repay.

J. Robert Hunter, director of insurance for CFA, announced that, "It's Christmas in October for the insurance and real estate industries because this plan is a gift. Instead of helping the relatively few businesses that can't get terror coverage, Congress is poised to give away reinsurance to a rich insurance industry that is poised for record profits."

CFA complained that, from reports it heard of the plan, insurers would not be required to pay back any federal assistance "unless total losses are quite low (ranging from $10 billion to $15 billion)."

CFA called this approach "a taxpayer-financed hand out."

The group said most federal assistance would not be repaid, and in contrast to House legislation, which required insurance companies to pay back all federal assistance, "this proposal would not require any payback if losses exceed $10 billion in the first year of the program, $12.5 billion in the second, and $15 billion in year three."

Even when payback is required, CFA called the amount "miniscule: insurers would only pay back the difference between the total amount of retentions paid by individual insurers and the caps stated above.

The consumer group said that, under the reported plan, the taxpayer share of a terrorist attack similar in size to that of theWorld Trade Center would grow from the current $14 billion to $33 billion.

As CFA sees it, the taxpayer assistance would kick in at levels that insurers could easily afford to pay. The required retentions that individual insurers would have to pay are 7.5 percent of the total amount of a company's written premium in the first year of the program, followed by 11 and 15 percent in the second and third year of the program, CFA said.

Taxpayer assistance, CFA said, would kick in "at ridiculously low levels for companies with low premiums. In some cases, taxpayers will be liable almost from the first dollar of losses."

By CFA's calculations, industry-wide, the retentions equate to $14, $23, and $35 billion, based on direct written premium in 2001 of just under $186.9 billion. The group said this is far below the $25 billion that insurers could afford for the first year of the program; about the size of the manageable 9/11 losses of the industry. It noted that after federal tax write-offs of 35 percent are allowed.

CFA said insurance companies can afford to pay far more.

Describing the market, it said, the property-casualty insurance business is booming. "These insurers reported a 66.4 percent increase in profits in the first half of the year. They brought in $25 billion more in new premiums in 2001 than in 2000, and are expected to report huge premium increases again this year. In addition, property-casualty insurers raised more capital in the wake of the Sept. 11th attacks than they lost because of the attacks (after federal tax write-offs.)"

A three-year program, CFA argued, will obstruct development of the private market for terrorism insurance. CFA said it has repeatedly documented that the growth of the private terror insurance market has made broad federal back-up legislation increasingly unnecessary.

In the CFA's view, insurance is available to all but the highest risks, such as skyscrapers that can't get full coverage, rates are falling, and banks are lending freely.

A mandated three-year program that offers federal support at low levels "will undoubtedly impede the progress of this fast-developing market. At the very least, a final proposal should go no further than both the House and Senate bills (S. 2600,H.R. 3210), which require only a one-year program with an option to extend the program for an additional year or two." CFA said.