This practice, called rescission, protects insurers from intentional fraud.

Attributing a sharp decline in the nation's construction projects to a lack of insurance, President Bush tried today to revive stalled legislation that would protect insurers from losses from terrorist attacks.

Most of the bonds are intended to protect insurers from disasters that happen once or maybe twice in a century, the sort they might otherwise have trouble covering.

Claims that size would also overpower the reinsurance industry, which sells policies to protect insurers from losses.

That is a viable strategy for 2006 and 2007, when the government will protect insurers against large losses on their Medicare drug business, Mr. Gorman said.

The bill protects smaller insurers by capping any individual company's liability at 5 percent of its premiums.

Despite reams of opinion surveys suggesting that the public wants reform in this area, the Republicans chose to protect insurers, health maintenance organizations and businesses at the expense of patients.

The bill the committee approved this evening would protect smaller insurers that face big claims and would give the industry tax breaks to encourage it to build up reserves for terrorism coverage.

A17 Move to Indemnify Insurers President Bush tried to revive stalled legislation that would protect insurers from losses from terror attacks.

But already, major reinsurers, which protect other insurers against huge risks, have notified their clients and the government that they intend to sharply limit or curtail their coverage for terrorist attacks.