There are also concerns about what will happen to the Senate bill in the House in the wake of indictment of the lead sponsor of the House bill, Rep. Michael Grimm, R-N.Y., today. He was indicted in Brooklyn on federal charges of underreporting payroll while running an Upper East Side restaurant. The probe started on allegations of illegal fund-raising.

PC insurers want prompt action on the legislation, as noted by AIA president and CEO, because market uncertainty "is beginning to emerge with TRIA's looming expiration, reinforcing the important benefit of maintaining the public-private partnership established by the law."

No insurance industry source would speculate on the potential impact of Grimm's legal problems on House consideration of reauthorization legislation.

In a letter to members of the Senate Banking Committee last week, officials of the Property Casualty Insurers Association of America and the National Association of Mutual Insurance Cos. sought to investigate efforts to impose European-style capital standards on insurance companies despite objections from U.S. state regulators.

In an investment note, Ryan Schoen and Stuart Paul of Washington Analysis expect insurers to strongly support amendments to the Senate bill that, amongst other provisions, create a larger role for the National Association of Insurance Commissioners (NAIC) in providing input for new insurance regulations.

Such a provision would likely be included in legislation Schoen and Paul expect Sen. Susan Collins, R-Maine, to introduce in hopes it is attached to the TRIA bill.

They expect her bill to seek to exempt insurers subject to federal regulation from bank-centric leverage- and risk-based capital requirements, so long as their activities are subject to state insurance regulation.

They said such legislation "will quickly attract the support of the 25 Senators who have co-sponsored legislation from Sherrod Brown, D-Ohio, and Mike Johanns, R-Neb.,  that would explicitly allow the Fed to "establish capital standards that are properly tailored to the unique characteristics of the business of insurance."

They also expect Collins to "explicitly carve out insurers" from the Collins Amendment, legislation she attached to the Dodd-Frank financial services reform act insurers which are subject to consolidated regulation by the Fed additional flexibility that would allow them the flexibility o continue using statutory instead of GAAP accounting practices.

The PCI/NAMIC letter seeking a hearing on international regulation asks the Senate panel to focus on the potential impact on consumers of ongoing efforts by international regulators to set a new global capital standard for internationally active insurers, even U.S.-based insurers already subject to the state-based system.

"This one-size-fits-all approach is being advocated over the strong objection of the states, who are the regulators in the U.S. for the business of insurance, without demonstration of need or concern for the loss of consumer focus, significant consumer costs and other negative impacts on our market," PCI and NAMIC said in the letter.

At the heart of the issue, according to Jimi Grande, senior vice president of federal and political affairs for NAMIC, is the fact that the U.S. and European systems differ greatly in their focus.

"There's a clear distinction between how we regulate insurance and what other nations do," he said. "The state-based regulatory system we have is designed to allow for a competitive marketplace while, at the same time, using mechanisms like guaranty funds to ensure that claims will still be paid should an insurer fail."

Grande said that the focus overseas is to prevent any company from failing so that bond holders, equity holders, and other claimants are protected, "and that requires a higher capital standard than is appropriate in our regulatory structure."

The letter added that in the view of PCI and NAMIC, Congress would find in examining the issue that "European standards would ultimately create needless and costly regulatory burdens for insurers and their policyholders while providing no added benefit to anyone."