The reinsurers are making their positions clear at this time for several reasons, one of which is to establish a line in the sand against so-called "ex gratia" payments, the "unknown unknowns" in the words of an American Re official that have made the U.S. market a difficult one to make money in, especially for European-based reinsurers that dominate the reinsurance industry.

The reinsurers also used the PCI meeting to make clear to trade groups that they should support the industry as Florida legislators and regulators gear up to put pressure on primary insurers to waive the multiple deductibles.

The Florida legislature is scheduled to take up the issue in special session next month. Gov. Jeb Bush is expected to propose the enactment of legislature that would reimburse homeowners forced to pay multiple deductibles with funds from Florida's Hurricane Catastrophe Fund, and that Gov. Bush has asked the CAT fund to look into how it can refund premiums to insurers that cover deductibles.

Many insurers, one industry official in Florida said, are waiving the deductibles.

In an apparent response to the reinsurers' call to trade groups to support them in the coming legislative session and the Florida regulator/industry meetings scheduled to follow in December, the American Insurance Association this week noted that the industry will be able to pay all claims as a result of the reforms, including the multiple deduction provision, put into place as a result of Hurricane Andrew in 1992.

Cecil Pearce, AIA vice president, southeast region, added, "We look forward to continuing our dialogue with Florida's political leadership in the weeks to come, as we address the public policy issues that this season's hurricanes have raised, including the issue of percentage hurricane deductibles."

American Re officials cited the wave after wave of asbestos litigation, unexpected losses on environmental coverage and construction contracts and other multiple claims that reinsurers didn't anticipate when they priced their coverage for their hard line. These losses made the companies either unprofitable or marginally so.

Another issue that apparently sticks in the craw of reinsurers is the Enron episode, when they bought into coverage that turned out to be financing agreements designed to improve Enron earnings, and not insurance contracts. "There is a renewed emphasis on due diligence," said Steve Morello, chief underwriting officer at American Re.

Matthias Weber, senior vice president and chief property underwriter, U.S. Direct, at Swiss Re Americas, said in an interview that deductibles "are a good thing." Mr. Weber explained that they allowed insurers to "filter out" the small claims that policyholders can handle, so that insurers and reinsurers can concentrate their time and capital on the larger claims that are beyond the resources of the insured.

Mr. Weber added that if the policy language calling for multiple deductibles is waived, "this would have an impact on pricing," in other words make insurance more expensive both for the homeowner and the primary insurer seeking to lay off some of his risk on the reinsurer.

Steve Dreyer, practice leader for financial institution ratings at Standard & Poor's, said he expects the primary insurers to absorb the cost of waiving the deductibles, if that is what they decide to do. Mr. Dreyer said he doesn't think the cost of this will be material, but has made no calculations. "If this turns out to be a large number, then this will turn the heat up" on everyone involved, he said, including the insurers and the Florida state officials dealing with the issue. "But I don't see the reinsurers taking any other position on this," Mr. Dreyer said.