Another underlying concern about TRIA was the five-year effort, from 2007 until July, needed to get another national insurance program, the critical National Flood Insurance Program, reauthorized for an extended period of time.

Rep. Judy Biggert, R-Ill., chair of the subcommittee, said the purpose of the hearing on TRIA was to give Congress an opportunity to examine the impact of TRIA over the last decade, and look closely at whether the private sector is ready to step in and provide reliable reinsurance and insurance coverage for terrorism-related losses without a federal backstop.

She said, "TRIA was always meant to fill a temporary vacuum in the private market, and after 10 years, this hearing will provide a fresh assessment of the program and the capacity of the insurance sector to provide this important protection."

But testimony by Lewis of the Hartford and others maintained that renewal of the program is essential.

Others testifying included representatives of the Property Casualty Insurers Association of America, the National Association of Mutual Insurance Companies, the Insurance Information Institute, the Independent Insurance Agents and Brokers of America, the Risk and Insurance Management Society, Inc., and the Financial Services Roundtable.

Steve Bartlett, president and CEO of The Financial Services Roundtable, said TRIA provides an "orderly mechanism through which terrorism losses are absorbed by the private sector, and [it] helps support the economy when we as a country are attacked."

Darwin Copeman, a member of NAMIC's board and president and CEO of Wisconsin-based Jewelers Mutual Insurance Company, testified that TRIA has been critical to the continued existence of a private market for commercial terrorism coverage.

"TRIA put a ceiling on potential insured losses and reduced the fear that a worst case terrorist event could render an insurer insolvent," Copeman said.

Robert Hartwig, president of the Insurance Information Institute, said that the looming expiration of the program "brings to a head the question of whether terrorism risk now, or ever, will be a risk that can be managed entirely within the private sector."

He said the evidence, both in the United States and from similar programs abroad, is that market stability in terms of both pricing and availability of terrorism coverage, as well as the ability to maintain adequate and expanding levels of capacity over time, "are contingent on the continued existence" of the program.

Michael Lanza, representing PCI and executive vice president and general counsel of the Selective Insurance Group, Inc., specifically noted TRIA's importance to the workers' compensation insurance market.

"State workers' compensation laws mandate coverage for terrorist acts in the workplace," Lanza said. "Without TRIA, it will be very difficult for insurers to obtain reinsurance in the private market."

He said that this could lead insurers, where possible, to exit the workers' compensation market. "For those insurers remaining in the market, the extent of losses could impair the ability to pay injured worker claims."

Lanza said that just as insurance is substitute capital for business, reinsurance is substitute capital for insurers.

"Without it, insurers will need more capital, which would certainly drive up workers' compensation costs. This could be a significant impediment to economic recovery, particularly as it impacts small businesses," Lanza said.

However, in a statement released in conjunction with the hearing, R.J. Lehmann, senior fellow and public affairs director for the R Street Institute, said that while we don't live in the "ideal world" where TRIA would be unnecessary, there remains a number of options Congress should explore to draw on private-sector solutions and better protect taxpayers as it looks forward to TRIA's expiration.

Among those options: examining whether the program should look to transfer at least a portion of its $100 billion of exposure to the global-reinsurance markets through traditional retrocession agreements, catastrophe bonds and other alternative risk transfer mechanisms.

 "This would better protect taxpayers, serve to ensure terrorism risk is not concentrated within the United States and encourage development of catastrophe models and other underwriting tools to better assess terror risk," Lehmann said.