We seem to have done a pretty good job identifying potential exposures, but we've fallen well short in terms of mitigation and insurance. It's a disgrace, and one can only hope our failures won't come back to haunt us someday.

For example, while everyone has to take their shoes off before boarding a plane, airport baggage and cargo screening was given a grade of "D." Cargo shipped by boat also remains vulnerable, as are our nuclear power facilities. Border security is still a joke. Reliable communications among first responders following an attack remains more wishful thinking than reality.

The most obvious failing is that homeland security funds "continue to be distributed without regard to risk, vulnerability or consequences of an attack," but more according to the shameful realities of pork barrel politics. Could you imagine a risk manager reallocating factory fire suppression funding to the executive golf course irrigation system?

Then there is the insurance angle. Here we are, less than a month away from the Terrorism Risk Insurance Act's expiration. Perhaps by the time you read this, Congress and the White House will have done the responsible thing and saved TRIA's vital terrorism reinsurance backstop, at least until we figure out a better way to handle this catastrophic exposure.

Still, the fact the government waited until the 11th hour to deal with this critical issue is symptomatic of how Washington is making up its terrorism response as it goes along. In a mad scramble reminiscent of a Marx Brothers movie, Congress has two very different approaches to reconcile before the Dec. 31 deadline. Some want to tag on tort reforms, which would doom the entire extension effort.

If TRIA were allowed to expire, insurers and buyers would be on their own. Terrorism coverage would be tough to find and hard to afford. Many would go bare. What a travesty that would be!

I shouldn't be surprised at Uncle Sam's ineptitude as a risk manager. The inadequacy of the levees in New Orleans, as well as the appalling incompetence exhibited in the aftermath of Hurricane Katrina, demonstrates the feds don't have a clue about risk management.

Perhaps it's time for the insurer and buyer communities to put together a Risk Management Advisory Council to help the government get a grip on the catastrophe exposures we face. Make it an amendment to the TRIA extension bill. In lieu of that, we all need to stay on top of Congress and the White House. Our lives depend on it.

Sam Friedman is NU's Editor-In-Chief. He may be reached at [email protected].

Quotebox, with mug:

"Perhaps it's time for the insurer and buyer communities to put together a Risk Management Advisory Council to help the government get a grip on the catastrophe exposures we face."