Moreover, they said, Congress will have very little time to legislate unless Treasury makes a decision quickly.

Brian Roseboro, Undersecretary for Domestic Finance with Treasury, was pressed repeatedly for a timetable during which Treasury will make decisions on two elements of TRIA.

The first is whether to extend the current law. The current law expires on Dec. 31, 2004, but Treasury is authorized to extend it through Dec. 31, 2005 by issuing a regulation.

The second element is whether the program should be extended beyond Dec. 31, 2005, which would require new legislation. Treasury is required by TRIA to provide Congress with a report on the effectiveness of TRIA and on the ability of the private market to offer terrorism insurance if TRIA expires.

But despite repeated urging to state a position on these two issues, Mr. Roseboro said that Treasury is still collecting information and is not yet ready to make decisions.

Sen. Chris Dodd, D-Conn., said that TRIA should have been a five-year program at the outset, but the political reality of the time was that a five-year program wasn't possible.

Still, he said, TRIA has had an important psychological impact and has injected confidence in the market.

Sen. Robert Bennett, R-Utah, noted that he and Sen. Dodd are circulating a letter among committee members that will be sent to Treasury urging it to extend TRIA.

He noted that TRIA was enacted following a long debate. Sen. Bennett said he still believes that the failure of Congress to enact TRIA quickly prolonged the recession and contributed to the softness of the recovery.

The recovery, Sen. Bennett said, now has traction and it would be a serious mistake if TRIA is allowed to expire.

Sen. Charles Schumer, D-N.Y., accused Treasury of having a "lackadaisical attitude" toward TRIA extension.

He said he is very concerned that Treasury does not appear to have a "sense of alarm" over TRIA extension.

Sen. Schumer said he does not understand why Treasury cannot speed up the timetables contained in TRIA to make a decision on extending it.

(TRIA sets a Sept. 1, 2004 deadline for a decision on whether to extend the existing law and a June 30, 2005 deadline for the report to Congress on the effectiveness of the program.)

But Mr. Roseboro replied that from the date TRIA was signed into law, Treasury has stood ready to exercise its responsibilities.

Treasury, he said, understands that the timetables in the TRIA do not match up with the realities of the insurance business and will try to make adjustments to move things along.

But in his prepared testimony, he emphasized that Treasury must complete its ongoing data surveys in order to have the full and reliable information needed to make the evaluations required by the statute.

But one member of the committee, Sen. Wayne Allard, R-Colo., questioned the need for the legislation and challenged the insurance industry to disclose whether it believes TRIA should be permanent.

He said he reluctantly supported TRIA originally because of the extraordinary nature of the Sept. 11, 2001 attacks and his belief that a temporary backstop was needed.

But he emphasized the word "temporary," adding that TRIA itself leaves no ambiguity about the intent of Congress that the program should be temporary.

At the time, Sen. Allard said, the insurance industry came to Congress asking for TRIA, saying it needed a temporary backstop to allow the private reinsurance market to develop.

Now, he said, the industry is coming back with the same arguments.

"I'm not sure why we should believe it this time around," he said.

If the insurance industry views TRIA as a permanent program, such as the federal flood insurance program, it should say so and then Congress can have an honest debate, Sen. Allard said.

Once a sector of business becomes dependent on a "subsidy," he said, it becomes more and more difficult for the business to let go of it.

The real debate, Sen. Allard said, is whether TRIA will be a permanent program or not. The insurance industry has to be clear, he said.

Sen. Thomas Carper, D-Dela., asked Mr. Roseboro why the private market has not responded.

Based on the available evidence, Mr. Roseboro said, there appear to be several dynamics. First, he said, the insurance industry has not developed the ability to model terrorism risk and adequately price the coverage.

Also, he said, from the policyholder's perspective, there is an issue of risk perception. Some businesses, he said, still believe that terrorism insurance is too expensive and those outside major metropolitan areas may not believe they have a significant exposure.

Moreover, Mr. Roseboro said, some may believe that help will be available, whether or not they have insurance.