There were other signs that it will be difficult for the bill to secure passage. The Senate Judiciary Committee an hour before the noon introduction of the bill sent out a signal it will have a say on the bill.

The panel announced then that it will hold a hearing April 25 on "The McCarran-Ferguson Act: Implications of Repealing the Insurers' Antitrust Exemption."

David Winston, National Association of Mutual Insurance Companies senior vice president for federal affairs, said the bill fails to distinguish between separate insurance sectors.

"In contrast to the life insurance business, the property-casualty business is much more locally based and not subject to competition from banks and securities firms," Mr. Winston said.

Charles Symington, senior vice president of government affairs and federal relations for the IIABA, said the IIABA believes the bill will eventually "lead to increased regulatory burden on our membership and will be harmful to consumers." He said later this month IIABA will fly in 1,500 agents to oppose it.

But Gov. Marc Racicot, president of the American Insurance Association, said the "AIA strongly supports this bipartisan legislation because it is rooted in free-market principles that allow competition to flourish."

Joel Wood, senior vice president, government affairs for the Council of Insurance Agents and Brokers, said, "Successful insurance agents and brokers do business on a multistate basis. Why shouldn't a producer be able to choose between one regulatory system or 50?"

The bill was introduced by Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D. Sources close to the legislation said they expect that Sen. Richard Shelby, R-Ala., chairman of the Senate Banking Committee, will hold a hearing on the legislation, although no formal action on the bill is expected this year.

The Senate licensing bill would create a federal regulator for insurers and producers that choose to be licensed and regulated at the federal level, according to insurance industry trade groups' attorneys who have analyzed the measure.

Its provisions call for an Office of National Insurance (ONI) to be housed in the Department of the Treasury and headed by a commissioner appointed by the president and subject to Senate confirmation.

Similar to a state insurance department, the ONI would license and oversee insurers, agencies and producers; issue regulations covering the breadth of insurance regulatory issues from market conduct to solvency to conversions to receivership; and enforce the insurance laws and regulations.

The ONI would include a Division of Insurance Fraud and a Division of Consumer Affairs.

The fraud division would be responsible for investigating suspected fraudulent insurance acts by persons engaged in the business of insurance or by other persons. The bill's fraud provisions require that each national insurer place a fraud warning on policy applications and claims forms.

The Division of Consumer Affairs would be responsible for enforcing market conduct regulations required to be promulgated by the commissioner concerning the advertising, sale, issuance, distribution and administration of insurance policies and other products of national insurers and claims under insurance policies and other products of national insurers.

Compulsory state insurance laws that prescribe the mandatory coverage for workers' compensation, motor vehicle insurance or both would also still apply. In addition, federally-licensed insurers and producers would remain subject to general state laws, including unclaimed property and escheat laws, and applicable state tax laws.

The bill permits the creation of insurance self-regulatory organizations (SROs) for national insurers, national agencies and federally-licensed insurance producers. The SROs would have the authority to enforce member compliance with federal insurance law, any regulations issued by the commissioner and the rules of the organization itself.

Although the bill permits the commissioner to delegate certain authorities to insurance self-regulatory organizations, delegation of the commissioner's authority to issue licenses and make rules is prohibited.