The life insurance industry, which controls nearly $2 trillion, could suffer the same fate as the savings and loans, jeopardizing the financial security of millions of Americans, a senator contends.

Sen. Howard Metzenbaum, D-Ohio, who chairs the Senate Judiciary subcommittee on antitrust, said financially shaky insurers are able to conceal their real problems through questionable accounting gimmicks and with little policing from the states.But A.M. Best Co., which operates a well-regarded system of rating insurance companies, says insurers have maintained their secure standing, especially in comparison to other financial industries.

"We . . . do not agree that the insurance industry as a whole at this point in time is on the brink of financial crisis analogous to that of the savings and loan industry," Michael Albanese, a Best analyst, told the subcommittee Monday.

Metzenbaum cited a report by IDS Life Co. of Minneapolis predicting that the loss of consumer confidence following the failure of a prominent insurer "could have a widespread effect on the industry, with massive cash withdrawals induced by the insolvency of one insurer leading to the insolvency of other, less financially secure companies."

Albanese said Best "would not support the dire conclusions that have been reached regarding the potential insolvencies of several large and prominent insurers in the event of unspecified economic scenarios."

Metzenbaum called the hearing to explore whether the insurance industry and policyholders are jeopardized by insurers' heavy investment in high-risk junk bonds and commercial real estate that, because of a slowing economy, has lost much of its value.

Life insurance companies are said to hold about four times as many junk bonds as S&Ls did before scores of thrift institutions collapsed in the late 1980s.

Metzenbaum argued that lax state regulation allows insurers to list the value of bonds and real estate as their purchase price, rather than much lower current worth.

Thomas H. Borman, Minnesota commerce commissioner, said state regulators must learn from the mistakes of S&L regulators and require insurers to update the valuations of their holdings.

"This is yet another thinly disguised attempt to dupe the public into believing that their security blanket is not in jeopardy," Metzenbaum said. "The insurance industry, and particularly the life insurance industry, has enormous sums invested in these troubled assets."

Terence Lennon, chief examiner of the New York Insurance Department, questioned the logic of such a move unless an insurer's liabilities - its promise to pay off on policies in the future - also are revalued. Because of the wide variety of policies now available, he said, that would be a mistake.

Metzenbaum had asked six life insurance companies to testify at the hearing. They declined, and the senator said their refusal "sends a loud and clear message - they cannot stand the tough scrutiny that the public demands and deserves."

The American Council of Life Insurance, which represents most companies, was not allowed to testify but submitted a brief written statement from President Richard S. Schweiker.

Metzenbaum is exploring whether the federal government should take over some or all of the task of regulating the insurance industry from the states.