The US National Association of Insurance Commissioners has passed a resolution backing the renewal of the Terrorism Risk Insurance Act.

The Act, due to expire at the end of next year, was established in 2002 as terrorism cover grew scarce following the September 11 2001 attacks.

The government program, which has already been extended twice, provides reinsurance coverage for major losses.

“We strongly urge members of Congress to reauthorise this critical piece of legislation,” association President-Elect Adam Hamm said.

“In addition to providing essential coverage for commercial policyholders, this federal backstop remains an invaluable part of the industry’s ability to preserve its financial protection and maintain risk management.”

American Insurance Association (AIA) President and CEO Leigh Ann Pusey has welcomed the move.

She says the act “remains an essential component of our nation’s economic security. Since its inception in 2002 [it] has stabilised the market and made terrorism risk insurance coverage widely available.

“[The Act] provides much-needed predictability for an orderly economic recovery after an event. Thanks to the certainty the program provides, businesses are able to make decisions and free up capital for business expansion and economic growth.

“AIA will be working in the months ahead to achieve broad bipartisan support for reauthorisation of this vital program.”

Three bills aiming to extend the Act have been introduced in the US House of Representatives.