(by Geck Finn)

Legislation to extend and expand the Terrorism Insurance Act of 2002 has been introduced in the Senate by sponsors from both parties, according to Business Insurance.

The bill, sponsored by Senators Christopher J. Dodd, D-Conn., and Robert Bennett, R-Utah, would extend the original legislation through 2007 and would add several amendments. Among those changes is a provision requiring insurers through the last year of the program to make terrorism coverage available that is in effect for at least 12 months.

The extended program also would apply to group life insurers under an amendment in the legislation.

TRIA, the program that created a federal backstop for private insurers’ losses in the event of catastrophic terrorist attacks, is set to expire on Dec. 31, 2005.

Legislation to extend TRIA is also pending the House of Representatives.

Insurance industry representatives praised the bill’s introduction.

It “adds to the momentum for congressional action in 2004 and demonstrates bipartisan support for maintaining TRIA’s critical economic safety net,” said Leigh Ann Pusey, senior vp of government affairs for the Washington-based American Insurance Assn., in a statement.

Joel Wood, senior vp of government affairs at the Washington-based Council of Insurance Agents & Brokers, said that bipartisan support for the bill is encouraging, but Mr. Wood noted that “the clock is ticking.”

“The challenge the insurance industry has is convincing the leadership that this is legislation that is necessary not at the end of next year but is necessary to avert an availability and affordability problem next year,” Mr. Wood said. If coverage is written next year without the extension in effect, it will leave policyholders “naked to the threat of terrorism,” he said.

Janice Ochenkowski, vp for external affairs of the New York-based Risk & Insurance Management Society Inc., said in a statement, “This legislation will ensure that terrorism insurance is available to commercial insureds in a comprehensive and affordable manner, while it directs the Treasury Department to provide long-term solutions for expanding the availability and affordability of terrorism insurance absent a federal backstop.”