After bailing out the nation’s airlines, reports The Waal Street Journal this morning, President Bush and Congress are moving quickly to give the hard-hit insurance industry a helping hand in the wake of Sept. 11’s terrorist attacks.

The Treasury Department and lawmakers from both parties are drafting legislation that would make the federal government the insurer of last resort for practically all businesses that suffer future terrorist attacks.

Bush met at the White House Friday with a dozen senior executives from insurance companies and trade groups, who pressed him to back such a program. The move would commit the government permanently to underwrite tens of billions of dollars in damages if attacks continued. The alternative, says insurers, could be cancellation of coverage, possible shutdown of many businesses and economic turmoil.

The insurance-industry leaders — including American International Group Chief Executive Maurice “Hank” Greenberg, Hartford Financial Services Group Inc. CEO Ramani Ayer and Massachusetts Mutual Life Insurance Co. CEO Robert J. O’Connell — also asked Mr. Bush at the meeting to support their efforts to have disputed claims from the terrorist attacks consolidated in a federal district court in Manhattan, a provision included in the new law.

The insurance industry is one of the United State’s most politically active business sectors, ranking sixth among industries in total contributions during the 1999-2000 election cycle, and No. 7 among contributors to Bush’s inauguration, according to the Center for Responsive Politics, a nonpartisan, nonprofit group that tracks the influence of money on national politics. Greenberg and O’Connell both were “Pioneers” — early fund-raisers for Bush’s presidential campaign.

Intensifying federal interest in aiding insurers comes as loss estimates from the Sept. 11 attacks mount, and as some government officials worry that distress among insurers could cause broader troubles in the ailing financial markets, especially if insurers start unloading bonds and stocks to cover losses.

After leaving the White House Friday afternoon, Greenberg told reporters that insurers might wind up paying $40 billion for the attacks, well above the $30 billion that insurers had been talking about earlier in the week. That would make the attacks by far the biggest insured loss ever. Insurers insist they are able to withstand the blow for now. Citing the property-casualty industry’s capital cushion of more than $300 billion, insurers maintain they will be able to pay claims.

But only $217 billion of that is in the hands of property-casualty companies that write commercial insurance, according to the Insurance Services Office Inc. The rest is held by personal-lines insurance companies, which insure homes and cars. Only limited amounts of car and homeowner insurance are expected to be tapped for attack-related claims, as commercial insurers bear the brunt.