The Risk and Insurance Management Society (RIMS) has praised a bipartisan group of US senators for introducing a bill to extend the Terrorism Risk Insurance Act (TRIA).

The government program, which provides reinsurance coverage in the event of major losses, was introduced when terrorism cover fell away following the September 11 2001 attacks.

However, it is due to expire in its current form at the end of this year.

RIMS President Carolyn Snow says the senators’ move is encouraging but is “just the initial step” in a long legislative process.

“The senators who have introduced this bill understand the consequences of TRIA’s expiration and we applaud them for their foresight,” she said.

“We remain hopeful that the House Financial Services Committee also realises the impact TRIA’s expiration will have on all businesses across the US.”

RIMS believes that without a TRIA-type program many businesses will be forced to self-insure, and the whole economy would suffer.

A new report from Marsh says TRIA’s impending expiration is already affecting the availability and price of terrorism coverage.

Marsh & McLennan Companies President and CEO Dan Glaser describes TRIA as “a model public-private partnership”.

“[The report] confirms there is strong, long-term demand for the insurance it backstops, with more than six out of 10 companies in the survey purchasing coverage,” he said.

“The existence of the federal program plays a major part in the availability and affordability of the coverage.”

Another report by research organisation RAND says the loss of TRIA would force the Federal Government to increase spending.

“If, as many expect, allowing the program to expire causes a sharp decline in the number of businesses with terrorism coverage, we find that the... Government could spend billions more in disaster assistance after an attack than it would with the program in place,” lead author Tom LaTourrette said.