The US House of Representatives has defied the Bush Administration by passing the Terrorism Risk Insurance Revision and Extension Act, extending the Terrorism Risk Insurance Act for 15 years.

The House Financial Services Committee says the legislation encourages the further development of a private market for terrorism risk insurance.

But the Bush Administration, which has opposed the bill from the outset, says it will work through the remaining legislative processes to derail or water down the new law.

Treasury Assistant Secretary Financial Institutions David Nason says the 15-year extension runs counter to the public policy goal of reducing and eventually eliminating the Federal Government’s role in the terrorism insurance market.

He says the law sends the wrong message to the market for a program that was intended to be temporary.

The bill’s provisions include extending the duration of the program to 15 years; structuring make-available nuclear, biological, chemical and radiological cover in a way that offers support and flexibility for smaller insurers; eliminating the distinction between foreign and domestic terrorism; and lowering the program’s trigger level to $US50 million ($58.4 million).

The powerful Risk and Insurance Management Society supports the legislation. Director Terry Fleming says extension of the program is essential for the economic well-being of the nation, and the changes go a long way towards making a good program even better.

Meanwhile, a US Senate committee has approved a bill that will create a national commission to examine how to deal with natural catastrophe risks.

The Commission on Natural Catastrophe Risk Management and Insurance Act sets up a body to examine the insurance industry’s ability to cover natural catastrophes, the effectiveness of building codes and demographic trends.