First, he said, Congress and the White House want to make sure that businesses can transfer terrorism risks and remain in operation.

Second, he said, policymakers want to give the insurance market an opportunity to develop private sector solutions to the problem of spreading terrorism risk.

If the private sector cannot find a way to spread terrorism risk before the federal insurance program sunsets, Mr. Campbell said, the industry will be right back to where it was on Sept. 12, 2001, where no one had a risk-spreading mechanism. That, he said, would be the "ultimate failure for everyone."

Under the legislation, insurance companies must offer commercial insureds terrorism coverage, disclose the existence of a federal government backstop and identify separately the premium charged for terrorism coverage.

Insurance companies must demonstrate compliance with these requirements before their claims filed with the federal government can be certified. However, there are few specifics, either in the legislation or in the recently released interim guidelines from the Treasury Department, about how to comply.

Without specifics, Mr. Campbell said, insurance companies must be able to demonstrate they did the best they could to try and implement the legislation's underlying principles. If companies are guided by these underlying principles, he said, it will make the disclosure obligation more manageable.

Jason Schupp, assistant general counsel with the Schaumberg, Ill.-based Zurich North America, added that in releasing its guidelines, Treasury spoke also in terms of principles. In fact, Treasury noted that its guidelines are not the only means of compliance with the legislation's requirements, Mr. Schupp said.

Basically, he said, the communication to policyholders must be clear and explain what the Terrorism Risk Insurance Program is about. Essentially, Mr. Schupp said, it is an educational issue.

And educating policyholders also means that insurance companies will have to communicate with their producers, he said.

In order to certify claims filed with the federal government, Mr. Schupp added, the issue is not sending notices but proving that notices were sent. He added that it may not be necessary to match every claim with a piece of paper demonstrating compliance. Rather, Treasury may be satisfied if the insurance company can demonstrate a thorough compliance process.