Democrats have only a one-vote Senate majority. If Sen. Johnson is incapacitated or otherwise unable to serve, that could create a 50-50 tie, with Vice President Dick Cheney's vote making the difference.

Congress will deal with such critical industry issues next year as extension of the Terrorism Risk Insurance Act and whether to create an optional federal charter.

Sen. Chris Dodd, D-Conn., chairman-designate of the Senate Banking Committee, has already indicated he would support making TRIA permanent. If Sen. Johnson is unable to serve, Sen. Richard Shelby, R-Ala.–who opposes TRIA extension–most likely would remain in control of the panel.

Sen. Johnson was co-author of legislation introduced in the last Congress that would create an optional federal charter for insurers, and has indicated to the industry that he would reintroduce such legislation in the new 110th Congress.

Gov. Rounds, while publicly stating he is not a candidate, was being encouraged by the Independent Insurance Agents and Brokers of America, among others, to challenge Sen. Johnson for re-election in 2008–presumably because he would not support an OFC, which the IIABA opposes.

Gov. Rounds also opposed legal efforts by the Council of Insurance Agents and Brokers to break countersignature laws, testifying in federal court against the CIAB legal initiative last year. The state's countersignature law was later ruled by a judge to be unconstitutional.

Sen. Johnson was expected to head the Senate Banking Committee's key Financial Institutions Subcommittee, succeeding Robert Bennett, R-Utah. The panel deals with all regulatory, accounting and legal issues involving financial institutions.

In an analysis of the implications of a split Senate, Joe Lieber, senior political analyst for Washington Analysis, a securities research firm, said that more than V.P. Cheney's ability to break ties, the real difference in the makeup of a split Senate would be “in how committees are structured and the impact that might have on moving legislation–it obviously would be more difficult.”

Citing the last time it occurred, in 2001, Mr. Lieber said that Sen. Trent Lott, R-Miss., was named majority leader, since a Republican was the vice president at the time, giving the GOP nominal control.

In addition, while an equal number of Republicans and Democrats were represented on all committees, and committee budgets for both the majority and minority were equally divided, Republicans maintained their status as committee chairs.

The agreement gave the power to the majority leader or minority leader to discharge legislation or nominations that had not been reported out of committee because of tie votes. Also, motions to cut off debate on any amendable item were prohibited during the first 12 hours of consideration–thus making it easier, Mr. Lieber said, to filibuster legislation.

“If a 50-50 tie occurs, the parameters for organizing the Senate this time around could be different, but we suspect they will fall along these lines,” Mr. Lieber said.