The bill is in final draft form, and is being circulated to stakeholders, i.e., insurance industry trade group officials and lawyers, for their reaction, several lobbyists related.

Staff for the two senators have been saying for months that they planned to introduce the bill.

The Senate bill will call for creation of an optional federal insurance charter for life and property-casualty insurers, said Sen. Sunnunu's legislative director, Jamie Burnett, who discussed the plans at an Industry Summit held March 1 in Washington, D.C.

Mr. Burnett said the bill will call for creation of an independent federal regulator within the Treasury Department, similar to that of the Office of the Comptroller of the Currency.

Gary Hughes, executive vice president and general counsel for the American Council of Life Insurers, said later during the Summit that one advantage of the Senate bill is that the regulatory system proposed in it will have no impact on the federal budget.

Mr. Hughes said then that the industry has agreed to Senate legislation that would have insurers pay the cost of federal regulation through fees, the same system used by national banks, and even to pay the cost of establishing the system within Treasury.

Under the plan, Mr. Burnett said, the state guaranty fund system would remain in place, presumably with the states serving as liquidators for an insolvent federally chartered insurance institution.

It is unclear when any legislation calling for reform of the insurance regulatory system will surface in the House. Legislation calling for creation of so-called federal "standards" or "tools" designed to bring uniformity to state regulation has been in the draft stage for several years. Such legislation is dubbed the State Modernization and Regulatory Transparency Act (SMART).

The House bill, if and when it surfaces, is expected to include language calling for an end to rate regulation for property-casualty insurers, Glenn Westrick, majority counsel on the House Financial Services Committee, said at the Summit.

Primary sponsors of the House bill are Reps. Mike Oxley, R-Ohio, and Richard Baker, R-La., chairman of the committee and chairman of its key Capital Markets Subcommittee, respectively.

The language calling for rate deregulation is not being supported by Democrats on the committee.

It is unclear how the Senate bill will address this issue.

In comments at the summit, Alessandro Iuppa, Maine superintendent of insurance and president of the National Association of Insurance Commissioners, said reform was needed, but that federal involvement would create more problems than it would solve. Mr. Iuppa repeated NAIC opposition to federal involvement in comments last week at an NAIC activity in New York.