Causes and implications of the crisis in liability insurance availability and affordability are discussed in this report. The working group concluded that tort law is a major issue in the insurance crisis and that the federal government can address that issue. The group also concluded that the federal government can do little to remedy other factors, such as the large underwriting losses recently experienced by the insurance industry. Chapter 1 describes significant problems many municipalities, businesses, and professionals have in obtaining liability insurance. Part A of Chapter 2 reviews the current financial condition of the insurance industry and the economic factors leading to that condition. Part B of Chapter 2 reviews the impact of tort law on the insurance availability/affordability crisis. Chapter 3 summarizes responses to the crisis from the insurance industry, its customers, and state regulators. The conclusions of the working group are presented in Chapter 4, along with eight recommendations for tort law reform. Chapter 5 details the undesirable and ineffective consequences of a federal insurance or indemnification program. Concluding remarks list five recommendations for federal action. (RH)