The US Senate has approved a bill to extend the federal terrorism insurance coverage support plan for two years from January 1. The legislators had been ignoring the extension of the Terrorism Risk Insurance Act for most of this year, with the Bush administration saying it wasn’t necessary any longer and the insurance industry lobbying strongly for its retention.

However, the “trigger” amount for the US Government to step in and provide financial support has been raised from the $US5 million ($6.79 million) in the old legislation to $US50 million ($67.9 million) next year and $US100 million ($135.7 million) in 2007.

Professional indemnity and commercial vehicle have been removed from the Act, and insurers will have to pay a deductible on direct earned premium of 17.5% next year and 20% in 2007 for insurance classes covered by the plan.