Terrorism extension passes first, but easiest, hurdle
The current reinsurance pool was established following the September 11 terrorism attacks, after most insurers withdrew cover for terrorism events. It provides back-up cover for insurers in the event of a terrorism attack causing property and casualty losses of more than $US100 million ($115 million).
The original bill was renewed in 2005 but is set to expire at the end of this year.
The Democrat-led push to extend the program has opponents in the Republican Party. Advisers to the White House say the pool was never meant to be permanent policy and private insurers should now be better able to cover terrorism events. They are also concerned about amendments that extend the program to cover acts of domestic terrorism and include group life insurance in potential payouts.
"The administration strongly opposes efforts to expand the Federal Government's role in terrorism reinsurance," senior budget officials said in a statement. "The most efficient, lowest-cost, and most innovative methods of providing terrorism risk insurance will come from the private sector."
President George W Bush has also threatened to veto the legislation if it passes through the Senate unchanged.
Supporters of the extension, including the Risk and Insurance Management Society (RIMS) and New York Republicans, say the insurance industry is not yet ready to cope unsupported with terrorism threats. They say big building projects, including the reconstruction of the World Trade Centre in New York City, cannot go ahead without adequate terrorism cover.
RIMS President Janice Ochenkowski says the industry is ready to lobby the next arms of Government to keep the Act intact.
"RIMS is pleased that the bill makes significant improvements on the current TRIA program. We urge the passage of this bill and look forward to working with Senators and their staff throughout the legislative process."