That would set up a House-Senate conference to reconcile the differing bills.

Both bills raise the "trigger" for federal involvement in paying claims for an act of terrorism from $5 million currently to $50 million in the first year and $100 million in the second year.

The Senate measure also raises the retention level on claims from the current 15 percent to 17.5 percent in the first year and 20 percent in the second. It also reduces the number of business lines covered by the federal backstop.

And, most importantly, it seeks to ensure that the federal government ends its role in providing a terrorism risk backstop for insurers after Dec. 31, 2007.

The House bill, by contrast, leaves open the possibility that the bill could be extended and adds group life to the lines covered.

Equally important, it introduces a "silo" system for federal involvement in providing a terrorism risk backstop by establishing different levels of government backstop based on the market's perceived ability to provide reinsurance for a particular line.

Specifically, the legislation would require workers' compensation insurers to pay 16 percent of a covered loss the first year of renewal and 18 percent in the second year.

The insurers retention levels for other lines would be: property, 21.5 percent in the first year and 22.5 percent in the second year; group life, 21.5 percent in the first year and 22.5 percent in the second year; casualty, 25 percent in the first year and 30 percent in the second year; and NBCR (nuclear, biological, chemical and radiation), 7.5 percent in the first year and 8.25 percent the second year.

The House bill also calls for streamlining regulation of surplus lines was added during the markup.

The surplus lines provisions would allow sophisticated commercial purchasers of commercial coverage that includes terrorism to bypass state regulations requiring proof that a risk has been declined by three state licensed carriers before a purchase is made from a non-admitted surplus lines carrier.

Additionally, all other surplus lines policyholders (who buy insurance with terror cover on a multistate basis) would only have to abide by the declination rules in the state in which the insurance was placed.

Leigh Ann Pusey, American Insurance Association senior vice president, government affairs, said Senate passage of the bill is significant and a critical step toward getting workable legislation to the president's desk before the end of the year."

Ms. Pusey also urged the House to bring "its legislation to the floor as quickly as possible."

Charles E. Symington Jr., senior vice president for government affairs and federal relations at the Independent Insurance Agents and Brokers of America, added that, "The passage of this language really moves the process forward."

Mr. Symington stated, "We are very hopeful that the House will approve its legislation very soon, and then it is a matter of reconciling the language to produce unified legislation. We are very confident that an extension can make it through Congress and to the president's desk before TRIA expires."