http://dailynews.yahoo.com/h/nm/20010920/bs/attack_congress_insurance_dc_1.html

By Adam Entous

WASHINGTON (Reuters) - In sharp contrast to the airline industry's high-profile campaign for a multibillion-dollar bailout, insurance companies are quietly pressing Congress for tax relief in the aftermath of last week's devastating hijack attacks.

Congressional sources said the legislation under consideration would remove hurdles to industry consolidation and give some insurers a break on their income taxes by allowing them to use their losses in one subsidiary, such as property-casualty, to offset gains in another.

Since companies pay taxes on their gains, the shift could yield substantial tax savings -- $1 billion or more over 10 years, according to some estimates.

Experts say property-casualty insurance losses could add up to $30 billion. That would top the record $20 billion paid out for Hurricane Andrew, which devastated parts of Florida and Louisiana in 1992 -- hitherto the industry's most expensive event.

American International Group Inc. (NYSE:AIG - news), the largest insurer of businesses in the United States, and Hartford Financial Services Group Inc. (NYSE:HIG - news), are among the companies that could benefit from the tax law changes, which industry groups have been seeking for years.

``Publicly, the companies are not asking for anything. But they are quietly working this issue,'' one congressional aide said on Thursday.

Another aide said lobbyists were ``working'' the phones and sending out e-mails ``almost instantly after'' the Sept. 11 attacks. He described their request as ``particularly compelling'' given the industry's exposure after hijackers rammed passenger jets into New York's World Trade Center and the Pentagon (news - web sites).

Congressional aides said the legislation may be wrapped into a broader stimulus package aimed at shoring up the U.S. economy, badly shaken by the attacks. House and Senate leaders are expected to complete that package in the coming weeks.

INSURERS SAY BUSINESS SOUND

The insurance industry's behind-the-scenes push for assistance contrasts sharply with the very public campaign mounted by U.S. airlines.

Earlier this week, major carriers asked Congress for $24 billion in aid.

Lawmakers whittled that down to $17.5 billion, and the White House on Wednesday proposed a much smaller airline plan that would include $5 billion in direct cash assistance and some protection from lawsuits stemming from the attacks.

Whereas some airlines warned lawmakers that they faced bankruptcy, insurers insisted that they would be able to meet their obligations and would not invoke ``acts of war'' exclusions to avoid paying out claims.

``We are well capitalized and financially sound,'' a spokeswoman for the American Insurance Association said, adding that its lobbyists were not pushing for any tax benefits. The group did not rule out seeking assistance in the future.

Officials with other associations also played down the lobbying effort, noting that insurers have been long-time advocates of legislation that would remove tax hurdles to consolidation of life and non-life insurers.

One Democratic aide said industry officials were keeping a low profile because they did not want to appear to be using the current crisis to their ``legislative advantage.''

-- Anonymous, September 20, 2001