"If the price is seen as unaffordable, it could generate a significant backlash down the road," added Edmund Kelly, chairman, president and CEO of Liberty Mutual Group in Boston.

"I am a little concerned about people having a false sense of predictability--that we are able to assess the risk and determine a price" with any absolute certainty, said Edward Rust Jr., chairman and CEO of State Farm Mutual Automobile Insurance Company in Bloomington, Ill. "Even though the law did create a feeling of confidence for the broader business community, it's real unstable as to how this is actually going to pan out."

Ramani Ayer, chairman and CEO of The Hartford, said he was concerned that "it is not that evident to the public that we are still assuming a large risk, even with a federal backstop"--a misperception that he fears could skew public perception of the industry's pricing needs and procedures.

Should the law fail to deliver affordable rates, Congress will look for someone to blame, and the obvious target is insurers. Carriers could be called on the carpet to explain their inability to deliver on the promises Congress made by implication when it passed legislation to reopen the terrorism insurance market, some here suggested.

However, the spotlight might shine most brightly on state regulators and their role in making sure insurers deliver affordable coverage, a number of the CEOs agreed. Support in Washington for a federal chartering option might gain momentum, some said--not necessarily a negative development for many on the panel who said they support a bigger federal regulatory role.

"The terrorism bill may be the springboard [to optional federal chartering]," said Jeffrey Post, president and CEO of Fireman's Fund Insurance Company in Novato, Calif. "If certain state regulators make this bill ineffective, it will draw the attention of Congress and be an example as to why we are frustrated with the state regulatory system."

Many of the assembled CEOs said they had worked shoulder-to-shoulder to get a federal terrorism backstop in place, and during their lobbying efforts became painfully aware of their industry's vulnerability in Washington.

"We as an industry do not have the kind of pull on Capitol Hill that our position in the economy should give us. We needed the real estate industry's push, along with other outside support, to help pass this bill," said Mr. Ayer.

"As we were lobbying for the terrorism bill, there was no [federal] regulator who looked out for our interests; for our solvency concerns," he added later. "We have to consider ways to improve our regulatory framework to correct this deficiency."

"During the terrorism debate, it became apparent that there's no one person in Washington who speaks for us. There's no one voice," agreed Mr. Liddy. "This inevitably raises the federal chartering issue."

Brian Duperrault, chairman and CEO of Bermuda-based ACE Ltd., said that on broader issues, "because there is no federal regulator in insurance, there is a vacuum in discussions on global regulation of insurance. For that reason alone, we need to consider optional federal chartering."

Mr. Liddy called the current state regulatory system "unbelievably broken," and said "we've got to stay focused on getting [optional federal chartering] done." He joked that "all optional means is that you get to choose your poison," but emphasized that at least for some national carriers, a federal chartering system makes a lot more sense.

He acknowledged that insurers who back such a change still have "a long road ahead of them," but said the industry's disadvantages when trying to get a terrorism bill passed, as well as any difficulty in implementing the law, might help federal charter supporters make their case to Congress.

Still, current evidence might be insufficient to persuade Congress to take on a broader oversight role, said Mr. Rust.

"If not for the horrific events of 9/11, we would not have a terrorism bill, even though a terrorism risk clearly existed," he said. "It may take another horrific event--a major earthquake along the New Madrid fault, a hurricane that goes all the way up the coast into New York--to test how insurers will respond and how the patchwork state regulatory system responds. That could be the determinant of what regulatory role the federal government eventually plays."

The annual Property-Casualty Insurance Joint Industry Forum was co-sponsored by the Alliance of American Insurers, the American Institute For Chartered Property Casualty Underwriters, the Insurance Information Institute, the Insurance Services Office, and the National Council On Compensation Insurance.

The event was also sponsored by ACORD, the Geneva Association, the Institute For Business & Home Safety, and the National Insurance Crime Bureau.