If the $10.5 billion California Earthquake Authority (CEA) gets state legislative approval, it is apt to come "down to the wire,'' California's deputy insurance commissioner Richard Wiebe said.

Supporters of the California Earthquake Authority (CEA) have until month's end to lobby for approval of what would be the US's only state-run earthquake insurance pool.

California insurance commissioner Charles Quackenbush proposed the CEA as a solution to the insurance availability shortage after the Northridge earthquake caused billions in insured losses in January 1994.

"It will probably go down to the last day,'' Mr. Wiebe said.

"It has become a highly charged political issue.'' Significant to the facility's funding would be a huge reinsurance arrangement with Bermuda property catastrophe reinsurers.

"It was a programme we did support (and) something we could certainly look at (again),'' International Property Catastrophe Reinsurance Company Ltd.

president and CEO John Dowling said.

He also said, in future, IPC Re would look at a proposal "positively.'' Critics of the plan, primarily consumer groups, believe insurers' financial commitment should be increased to end a perception that the plan an insurance industry bailout, The Journal of Commerce, reported last week.

They also say San Francisco Bay area residents would pay unfairly high rates for a CEA earthquake insurance policy.

Insurers are increasingly restricting the range of homes they are prepared to cover making a solution more urgent.

Under California state law, any insurer offering homeowners' coverage must also offer earthquake insurance.

The CEA, which would be state-owned, publicly-managed and privately-funded, is high profile because lack of homeowners insurance availability negatively impacts the state's real estate market just emerging from the recession of the early 1990s, Mr. Wiebe said.

The CEA is six votes short of achieving the two-thirds majority needed to pass the state's 40-seat senate. The legislation received assembly approval earlier, he said.

The state legislature's current session is due to end August 31 and as California's budget has been passed, there's is little hope for a legislative extension, especially in a presidential election year, Lloyd's List said last week.

No major bills were expected to be passed this week as many GOP lawmakers are attending the Republican National Convention in San Diego. On July 12, a day prior to the legislature's recess, the state's senate rejected the legislation after six months of public hearings, committee debates and votes, deliberations. The rejection also came after two-house conference committee and lower house approvals.

If the CEA fails to achieve legislative approval it will likely re-emerge during December's brief sitting then again in January, Mr. Wiebe said.

"No other alternatives have emerged as viable counterproposals,'' he added.

At this point it looks as if its the "CEA or nothing.'' As well as Bermuda-based property catastrophe reinsurers' backing, the CEA would be funded by state-backed bonds, policy premiums and investments.

The renewed push to pass the legislation came after a California Department of Insurance (CDI) insurance homeowners' market survey which showed further evidence that existing insurance availability crisis was getting worse.

The survey found less than .2 percent of insurers are now writing new policies which do not carry increasingly tighter underwriting restrictions.

CDI surveys since May 1995 have found the picture for homeowners and real estate has grown bleaker, Mr. Quackenbush.