December 28, 1993

NEW forms of microbial life are being discovered in such abundance deep inside the Earth that some scientists are beginning to suspect that the planet has a hidden biosphere extending miles down whose total mass may rival or exceed that of all surface life. If a deep biosphere does exist, scientists say, its discovery will rewrite textbooks while shedding new light on the mystery of life's origins. Even skeptics say the thesis is intriguing enough to warrant new studies of the subterranean realm.

Strobe Talbott, a longtime friend of President Clinton and a former journalist who was catapulted into policy-making prominence as the Clinton Administration's top Russia strategist, will be named the State Department's No. 2 official, senior Administration officials said today. Secretary of State Warren Christopher, who is on vacation at his Santa Barbara home, will announce the appointment with Mr. Talbott at his side in Los Angeles on Tuesday, the officials said.

Companies The insurance industry is changing the way it sells homeowner insurance after big losses from Hurricane Andrew. Companies say they are using new techniques to measure risk better and to price coverage more appropriately, raising prices for higher-risk customers while reducing costs for those at less risk. [ Page A1. ]

While the appointments and pronouncements of the Giuliani transition are drawing intense public scrutiny, another round of citywide appointments -- with a decidedly more Democratic slant -- is being made by the incoming Comptroller and Public Advocate. In the weeks since the election, both Mark J. Green, who will become the Public Advocate, and the incoming Comptroller, Alan G. Hevesi, have been working in relative obscurity, forming their own staffs and setting goals for their respective offices. And while they, like Mayor-elect Rudolph W. Giuliani, are far from completing their appointments, certain patterns are beginning to take shape.

Trade relations between the United States and Japan took a turn for the worse today as the two countries announced another drop in the foreign share of Japan's computer chip market, the leading barometer of trans-Pacific trade. In response, the United States ordered emergency talks with Japan, a step that could eventually lead to trade sanctions.

The Metropolitan Life Insurance Company, its reputation tarnished by improper sales activities, said yesterday that it would offer refunds to customers who were misled in purchases of life insurance policies since 1990. The company also said it had dismissed or forced into retirement seven executives, including its highest-paid salesman. The company's problems resulted from sales literature that promoted some insurance policies as savings and investment plans instead of forthrightly labeling them as life insurance. The company's office in Tampa, Fla., was the source of most of the misleading literature, but a few other offices around the country also became involved.

Optimism in Mideast Talks As Israelis and Palestinians arrived in Cairo for more talks, there were expressions of optimism that obstacles could be overcome. Page A3. French Atlantic Beaches Shut France closed beaches along its entire Atlantic coast, which has recently been polluted by explosives, acetone and pesticides. Page A7. Hints of Deep, Dark Life Strange heat-loving microbes from inside the earth may be evidence of life as much as three miles below the surface. Science Times, page C1. Ex-Teamster Chief Dies at 99 Dave Beck, the tough-talking president of the teamsters' union who defied a Senate investigation but lost his job, died in Seattle. Page D18. A2 Arts

Les Guelde and 61 other former workers at a Campbell Soup Company plant in northwestern Ohio have an anniversary this month that is hardly cause to celebrate. In the weeks before Christmas 1992, they were accused of using illegal drugs and alcohol on company property and were swiftly dismissed despite their denials and what they said was inconclusive evidence against them. Campbell said its actions followed other employees' complaints that drug users and drinkers were jeopardizing safety at the plant at a time when some experts were warning that substance abuse in the workplace was rising.

COLD BRINGS OUT HARDY AND FOOLHARDY The streets of New York City remained thick with activity and overt foolhardiness in the midst of a cold spell that seemed to have startled the metropolitan area after a lulling holiday weekend. Temperatures dropped to a low of 10 degrees in Central Park and rose to only 20, immobilizing cars and penetrating both expensive parkas and makeshift cardboard shelters. A1.

The chief fiscal adviser to Mayor-elect Rudolph W. Giuliani said yesterday that New York City was facing a budget gap for next year even larger than the $2 billion projected a month ago by a special committee formed by Mayor David N. Dinkins. The adviser, Abraham M. Lackman, said the gap in the budget for the fiscal year that begins in July -- the first Mr. Giuliani will have to prepare -- had grown by at least $250 million because of a significant decline in the assessed value of the city's real estate.

FROM the jaw of an ancient bird unearthed in a German slate quarry and from fossil leg bones of baby dinosaurs found in Montana, two groups of scientists have turned up striking new evidence that birds are closely related to dinosaurs. For more than a century, paleontologists have noticed similarities between the fossils of many dinosaurs and the skeletal structure of modern birds, and many scientists say they believe that birds evolved directly from dinosaurs. Some ornithologists, on the other hand, argue that these similarities are coincidental, resulting from parallel but independent development of birds and dinosaurs. The debate remains far from settled.

The Federal official who directed radiation experiments on humans was warned soon after the program began that the research would invite comparison to Nazi experiments on concentration camp inmates, a 1950 memorandum reveals.