Lobbying efforts on civil litigation reform will switch from proactive to defensive, he said, while attempts to repeal McCarran-Ferguson may gain new currency.

The industry's likelihood of not only an underwriting profit but record overall profits this year will be a public relations challenge when many policyholders are facing soaring property rates, Mr. Racicot said.

“This fundamental lack of understanding of insurance industry finances can be frustrating,” he said.

Joining Mr. Racicot in the discussion was Republican New York Insurance Superintendent Howard Mills, who has said he will resign next month before the January takeover by a Democratic governor.

Mr. Mills made the case for either an extension of TRIA, or better yet, establishment of a permanent backstop for terror risk.

“To those who say there should be a market solution, I say there will be one, but you will not like it,” he said. “Insurers will just walk away from the risk.”

The AIA chief made the case for an optional federal charter bill. Mr. Mills was unwilling to go that far, calling only for some sort of “federal voice” for the p-c industry and some new federal-state hybrid regulatory scheme.

Mr. Mills also said the new Congress might take a fresh look at the issue of tax-free reserving, which has been a nonstarter in the House for the past several years.

Both Mr. Racicot and Mr. Mills came out against a proposed backstop for mega-catastrophe risk. Mr. Racicot said such programs end up discouraging the kind of activities such as building code and flood zone enforcement that are the key to solving the problem.