SECTION: BUSINESS; Pg. E1

LENGTH: 455 words

HEADLINE: TALKS, STILL NO DEAL ON INSURANCE BACKSTOP;
LIMITS ON LEGAL LIABILITY REMAIN KEY ISSUE

BYLINE: MICHAEL REMEZ; Courant Staff Writer

DATELINE: WASHINGTON --

BODY:
Compromise wording on a federal terrorism insurance backstop continued to elude White House and congressional negotiators Friday, although all sides vowed to keep talking.

With the legislative session rapidly drawing to a close, lawmakers and advocates of the legislation -- including companies such as the Hartford Financial Services Group and Travelers -- had hoped an agreement would be in place by this weekend. That would have given ample time for final action next week. But the strong Republican push for significant limits on the legal liability of business and property owners hit by terrorism -- and stiff Democratic resistance -- has created a standoff that, so far, has stymied progress. Now they are in danger of running out of time because lawmakers hope to adjourn at the end of next week to focus on coming elections.

The GOP-controlled House and the Democrat-controlled Senate passed different versions of legislation intended to protect insurers from calamitous losses in the event of another terrorist attack. Faced with huge losses following the Sept. 11 attacks, many reinsurers stopped writing terrorism coverage. That left insurers unwilling to write the coverage, as well, especially in large cities or for trophy properties that could become targets.

President Bush has pushed the legislation as vital to the nation's economy, saying that new terrorism coverage could free up billions of dollars worth of planned real estate deals and construction programs now on hold. And he has said an agreement could create many thousands of jobs.

Sen. Christopher J. Dodd, D-Conn., and a principal author of the Senate bill, has said repeatedly that he thinks negotiators could quickly resolve the differences in insurance provisions between the two bills once they agree on the liability language.

Throughout the week, the two sides exchanged proposals on legal language, narrowing the gap, but not quite finishing the job. Thursday, the White House offered compromise language that it said should address Democratic concerns.

But on Friday, Democrats were not ready to sign on, and the two sides continued to trade allegations.

"We have made significant progress," Dodd said in a prepared statement. "However, there are some who continue to believe that the priority in this should be radical tort reform, not a responsible terrorism insurance plan."

Republicans focused their frustration on Senate Majority Leader Tom Daschle, D-S.D.

"Sen. Daschle and the Democrats are showing that they're more interested in trial lawyer protection than taxpayer protection, more interested in lawsuits than in jobs," said Rep. Mike Oxley, R-Ohio, and chairman of the House Financial Services Committee.

LOAD-DATE: October 14, 2002