Moody’s expects the US Terrorism Risk Insurance Act (TRIA) to be extended, but with greater financial responsibility passed on to insurers.

The Federal Government’s backstop for terrorism cover is due to expire at the end of this year.

The Senate Banking Committee has approved a seven-year extension, which will now go to a full vote in the upper house.

The House of Representatives Financial Services Committee has released a separate bill, which would extend the legislation by five years.

The committee will vote on the legislation in the coming weeks before a full vote.

Moody’s Senior VP Alan Murray says non-renewal would make cover more expensive and even unavailable for some high-profile risks. “The stakes for US property and casualty insurers and their insureds are high.”

With formal versions of a TRIA reauthorisation bill in both houses of Congress, Moody’s expects the program to be extended with a finite term.

However, it is likely more financial responsibility will be shifted to insurers, resulting in higher deductibles and retentions.

The ratings agency says loss triggers to activate the federal backstop may be increased.

Meanwhile, a report from the US Government Accountability Office has found comprehensive data on the terrorism insurance market is not readily available and Treasury analysis of federal exposure under different attack scenarios has been limited.

Without further analysis “Treasury lacks the information needed to help ensure the goals of TRIA, of ensuring the availability and affordability of terrorism risk insurance”, it says.

TRIA was introduced after private insurers withdrew cover following the September 11 2001 attacks.