That administration effort casts a strong shadow over renewal of the program, given the huge backlog of must-do items Congress must deal with before adjourning.

Mr. Henry said the Bush administration while engaged in talks over the bill in the Senate is insisting the bill bar any government liability for punitive damages stemming from a terrorism attack.

Such a position almost killed the bill when it came up on the House floor in November 2002 because Democrats ruled out inclusion of such language in any TRIA extension and would be in a position to stop such legislation in cases where there is a tight deadline to act.

"We believe and the administration has long stated that punitive damages should be excluded from any TRIA reform program," Mr. Henry said. "The administration has long stated its distaste for government dollars being paid for punitive damages."

Mr. Henry added, "Secretary [of the Treasury John] Snow sent a letter to Congress June 30 where he said specifically that current litigation rules would allow unscrupulous trial lawyers to profit from a terrorist attack and would expose the American taxpayer to excessive and inappropriate costs.

"If there is an extension, we would like to see directionally a smaller program, a tighter program, and an extension where the private market's 'skin in the game' continues to go up while taxpayer exposure continues to go down," Mr. Henry said. "Those are essential elements of any program, in our view."

Put another way, he said, "We are trying to maintain our principles that this is a program that should be temporary and should not crowd out private initiatives.

"To the extent something is permanent it serves to dampen innovation in the private markets," he said.

Mr. Henry confirmed that Congress is hoping to leave by Thanksgiving, and there is a lot of movement behind the scenes within the Senate Banking Committee and the House Financial Services Committee and other interested parties "as to what an extension should look like."

He confirmed that the administration is not supportive of proposals that would create different levels of government retention for different lines of business, or so-called "silos," because it would make the program "too complex."

Asked if the administration is leaning toward the greatest government support for the workers' compensation and property lines of business, with lesser levels of support for other lines, Mr. Henry said, "not necessarily."

"We would like to see greater simplicity and fairness than there is currently in TRIA," Mr. Henry said. He admitted that commercial auto "would fall into the definition" of lines of business the administration would not like to see supported, but added that "the Senate and House are going to have to work out the details."

In general, he said, "we just want fewer lines and a smaller overall program."

He confirmed the administration would like to see a $500 million trigger for government participation in paying claims from a terrorism event but cautioned that that position is sometimes misunderstood.

The trigger in the current bill is $5 million.

He explained the administration's definition of "trigger" is that the aggregate cost of an event would have to be $500 million before the government would become involved. Once that level is reached, government payments would be above so-called threshold levels, which under the current bill would mean anything above 15 percent of a claim. An insurance company insuring the loss would pay the first 15 percent. "A lot of people misunderstand that," Mr. Henry said.

At the same time, small and medium-sized insurers have been telling Congress ever since the Treasury Department issued its report in June that a trigger that high could potentially wipe them out before the government became involved.

Warren W. Heck, chairman and CEO of Greater New York Mutual Insurance Co., as well as chief underwriter, made that point clear in a letter to the leadership of the Senate Banking Committee last week.

"Without TRIA–or by re-enacting TRIA with a $500 million trigger and 20-to-25 percent deductibles, which from the market's perspective effectively amounts to the demise of TRIA–stand-alone terrorism reinsurance would either vanish or cost too much for all but the largest and most profitable companies to buy," Mr. Heck said.