"Along with your vote in favor of the merger, I ask for your patience and cooperation as we combine two corporate cultures into one cohesive organization," Mr. Pollard, said.

The combined organization, which would be known as the National Association of Property and Casualty Insurers, would have combined political action committee funds of $580,000, according to officials of the two groups.

An NAII spokesman said over the last two years NAIIPAC has raised $400,000.

Mr. Pollard, who is executive vice president of North Carolina Farm Bureau Mutual Insurance Company, said the merged trade groups would represent 40 percent of the total property-casualty market in the United States, giving "every member company more political clout in both statehouses and in Congress."

Jack Ramirez, NAII president, said in an interview that over the next week to 10 days the two groups hopefully will finalize a merger proposal for a vote by both boards and finally their membership.

Although a merger of the two groups isn't definite and something still could go wrong, "the chances are very good" that a consolidated organization, to be called the National Association of Property and Casualty Insurers, will be formed in early 2004, he said, speaking to NAII members.

"If the merger becomes a reality, it would be a truly historic development in our industry--the first merger of property and casualty trade associations in more than 80 years," he said.

He added later, "Simply put, a merger means more members, more market share, more resources, and more influence inside and outside the industry."

The merged organization would represent close to 50 percent of the industry on the personal lines side, he said. "It would give us over 1,000 member companies and between 450-500 insurance groups."

With member companies in every state, the merged group would have more influence over public policy, "which is what we want to have in order to be as effective as possible," he emphasized.

"The new organization will want to try to be as effective as possible in improving the regulatory system and in a number of other issues as well," he said, citing asbestos and class action reform, two topics on the agenda for Congressional action.

Mr. Ramirez noted that insurers have difficulty reaching consensus because "we have a diverse industry and a lot of differences in opinion." He said he hoped the merger would provide the critical mass to attract other companies to become members and work toward the "ultimate goal of a unified industry."

He acknowledged that the merged organization would clearly be the most diverse of the trade associations on the property-casualty side, which, he said, is both an advantage and a challenge.

"It's a challenge because we have more perspectives and points of view to try to bring together to reach consensus," he said. But a merged organization lends itself more readily to resolving differences among the competing interests within the industry, he said.

Mr. Ramirez noted that potentially divisive issues over who will be in charge and where the merged organization will be based have been resolved or are "pretty well decided upon," and they will not derail the plans. (The Alliance is based in Downers Grove, Ill., while the NAII is based in Des Plaines, Ill., within 30 miles of each other.)

"The only things we're still working on are more the technical-financial type" issues, he said.