Property and casualty insurers Monday opposed but did not dismiss an American Bar Association proposal to reform the civil justice system by repealing the law granting the industry limited antitrust immunity.

The ABA report reiterated the group's position on tort reform of the nation's liability system in response to comments presented by Vice President Dan Quayle during the association's annual meeting last August.Although the insurance industry has been open to discussing the repeal of the McCarran-Ferguson Act, the ABA proposal met with some industry resistance after the report's release Sunday, partly because of concerns about whether a revamped system would truly be an improvement.

One vocal critic of the plan was David Farmer, a vice president of the Alliance of American Insurers, a trade association that represents 170 property and casualty insurers.

"For the organization basically to wave the same bloody shirt with insurance reform once again continues to demonstrate that they are out of touch with mainstream thinking," Mr. Farmer said Monday.

The repeal of the McCarran-Ferguson Act and its antitrust exemptions for insurers fails to address the issue of reducing loss costs, said Mr. Farmer. He added that legal fees comprise a large component of insurance losses.

"Changing McCarran is not going to reduce the amount of monies that are paid out," Mr. Farmer said. "We're really puzzled how the bar association thinks this will address the issue of tort reform."

The American Insurance Association, which represents 251 major property and casualty insurers, reacted cautiously to the bar association's proposal even though the insurance group recently unveiled its own plan to repeal existing antitrust exemptions.

The bar association recommendations fail to establish "safe harbor" provisions needed to protect some industry activities from potential antitrust lawsuits for treble damages, said David Pratt, a federal lobbyist with the AIA.

Such safe harbor provisions should allow insurers to maintain historical databanks to monitor claims losses, to retain the use of joint underwriting pools for some lines of coverage and to continue some other collective activities.

"We have an alternative proposal on the McCarran-Ferguson Act, which favors the repeal of some antitrust provisions and establishes limited safe harbors," Mr. Pratt said.

A senior vice president with Johnson & Higgins, a New York-based insurance broker, warned that the bar association must remain open to modifying its proposal once its potential impact is evaluated.

"We have a state regulatory system which on the whole cannot be said to have failed," said Dennis Connolly, the Johnson & Higgins executive.

Rather than scrap the current system, Mr. Connolly urged a careful review of any new proposals before adopting fundamental regulatory changes.

The bar association recommended keeping the existing state regulatory structure. The federal government should defer to the states except in unusual circumstances where a regulatory objective cannot be achieved under the existing system, the report noted.

The need to spur competition is the driving force behind the proposals, the bar association indicated. "The perception is held that McCarran-Ferguson permits insurers to collusively manipulate the insurance mechanism and the price of insurance coverage," the bar association report noted.

"Clearly, the industry believes the exemption permits cooperative activity that otherwise could raise serious antitrust concerns."