State officials are expected to submit a proposal to Governor Paterson next week that would make New York more open to foreign-based reinsurers, a step that could pave the way for nationwide changes in a $100 billion-plus industry.

Mr. Paterson appears willing to approve the plan, expressing disappointment yesterday that the state has “discriminatory” restrictions on companies based outside America. Reinsurers, which provide insurance to other insurance companies, are currently subjected to a patchwork of state regulations across the country that for foreigners increase the cost of doing business. Domestic companies are opposing an overhaul of the system, arguing that to do so would erode important financial safeguards.

Mr. Paterson vowed to remove the restrictions on foreign companies following a dinner he attended with representatives from Lloyd’s of London on Wednesday night. In prepared remarks at the dinner, the Lloyd’s chairman, Peter Levene, noted that America has the only major reinsurance market in the world that regulates based on geography.

“You cannot compete in the international market when you are openly discriminating against foreign firms,” Mr. Paterson said during a press conference yesterday. “And they were pretty agitated about that. If I’d closed my eyes, I’d have thought I was talking to black people.”

Reinsurance is a means by which companies spread out risk across the industry, ultimately increasing the assets they can insure. Under current regulations, foreign businesses provide large amounts of collateral for claims they are insuring, while domestic businesses do not. Foreign reinsurers operating in America had about $120 billion tied up in collateral as of 2005, according the New York State Insurance Department, which drafted the proposal.

The Insurance Department superintendent, Eric Dinallo, said the changes would bring new capital into the industry and make it easier for individual consumers to obtain insurance. He also said New York’s move would likely prod other states into enacting similar changes. Mr. Dinallo is currently lobbying the National Association of Insurance Commissioners, an organization of state regulators that is considering a countrywide overhaul of reinsurance policy.

“We came up with a model that seems to have caught fire with the other states,” Mr. Dinallo said. “This definitely will equal lower property insurance costs because reinsurance is a large component of homeowners insurance.”

The CEO of the TOA Reinsurance Company of America, Terry Van Gilder, disputed Mr. Dinallo’s claim that the changes would bring more business to the state. But he agreed that new policies in New York could have a significant impact on other policymakers.

Foreign companies are “using New York as a wedge,” Mr. Van Gilder said. “What they really want is a couple of influential states to go to the NAIC and move this forward on a national basis.”

The proposed system would do away with regulations based on nationality, levying requirements based on companies’ financial strength. Businesses with strong credit ratings would have to pay less collateral than those with weak ratings.

The proposed changes have encountered resistance from domestic companies, which claim that collateral requirements are an important safeguard. Forcing businesses to pay their dues is difficult and expensive when they are based in another country, American reinsurers have argued.

“They say, ‘We’re not subjected to U.S. laws, so we’re not going to pay it,'” a CEO of a domestic insurance company said, referring to foreign corporations. “You’re not dealing with a bankrupt company, you’re dealing with a company that does not want to honor its obligations.” The CEO asked not to be identified by name because he does business with the state officials who drafted the plan.

The Insurance Department originally announced it was drafting the proposal in October, but did not finalize it until recently. Mr. Dinallo said he expects it to be enacted by the end of the year, following a review by the Governor’s Office of Regulatory Reform.