US President George W Bush gave the insurance industry a Boxing Day treat by signing a seven-year extension to the federal terrorism insurance backstop, just a few days before the program was set to expire.

The 11th-hour approval of the Terrorism Risk Insurance Program Reauthorisation Act of 2007 (TRIA) ensures US insurers will continue to receive US Government assistance.

The final bill represents a compromise between the House of Representatives' more ambitious plan to extend the program by 15 years and expand its coverage to include group life insurance, and the White House's reported desire to phase out the program.

Insurance Information Institute (III) President Robert Hartwig has welcomed the approval of the bill, which maintains the $100 million event trigger and now includes domestic as well as foreign acts of terror.

"It brings long-term stability to the commercial property-casualty insurance markets and eliminates uncertainty," he told insuranceNEWS.com.au.