The House yesterday approved overwhelmingly a bill under which the government would continue to provide a financial backstop to insurance companies in the event of another terrorist attack.

Rep. Michael G. Oxley (R-Ohio), chairman of the House Financial Services Committee, called the bipartisan 371 to 49 vote "the legislative process at its best," but it sets up potentially difficult negotiations with the Senate to work out differences with that chamber's bill.

The Bush administration strongly favors the more restrictive Senate bill, reiterating its view in a policy statement yesterday that the House measure "does not meet [White House] reform objectives."

Both bills would extend the 2002 Terrorism Risk Insurance Act for two years. That program expires Dec. 31, and insurers and other business interests are pressing hard for congressional action before that date.

Both measures would increase the level at which losses would trigger federal payments. That trigger is $5 million under current law and would rise to $50 million in 2006 and $100 million in 2007 under the pending bills. Deductibles that must be paid by insurers would rise to 20 percent from 15 percent.

But the House bill extends coverage to group life insurance, which is not covered under the expiring program. It also adds domestic terrorism to the acts covered; current law limits the protection to attacks by terrorists from other countries. And it separates deductibles for different types of coverage, which critics say increases potential claims on the program.

The administration has argued for months that the private insurance market can provide the necessary reinsurance, but, it said yesterday, "the continued presence of a federally backed subsidy crowds out private market initiatives and impedes the development of innovative, risk-sharing private market solutions."

But Oxley and other backers in the House said their measure, in contrast to the Senate bill, requires that insurers pay the government back in full if they tap the program.

The House bill would allow for a smooth transition to a fully private market system, they said, while assuring in the meantime that insurers remain able to pay claims if terrorists strike.

The House bill has broad support from business interests, including commercial property owners, developers, lenders and insurers, as well as House members representing areas that have been or might be terrorist targets.

The Coalition to Insure Against Terrorism, an alliance of builders, lenders, hoteliers, retailers, utilities and other businesses, endorsed the House bill yesterday, saying in a statement, "If enacted, this legislation will ensure that the nation's workers and businesses will be able to secure adequate and affordable insurance coverage against terrorism after the end of 2005."

Some consumer groups, however, argue that the measure is a handout to insurers.

The Consumer Federation of America said that "the two-year expansion of TRIA required in [the House bill] H.R. 4314 would cost taxpayers a total of $3.3 billion in new subsidies, in addition to the $2.8 billion insurers have already received. This is because insurers do not have to pay premiums for the reinsurance coverage provided by taxpayers under TRIA."

"It is unbelievable that the House would vote to expand TRIA when insurance profits are skyrocketing, commercial insurance rates are sinking and beleaguered taxpayers still face growing budget deficits," said J. Robert Hunter, CFA'S director of insurance.

Rep. Michael G. Oxley (R-Ohio) says the bill would allow for a smooth transition to a fully private market system for covering losses.