“As we look at the national debt clock, which I know is inconvenient to some, it principally turns because insurance programs–be they social insurance programs such as Social Security and Medicare or others–the government has not done a particularly good job,” Hensarling said. “That ladies and gentlemen, represents a man-made disaster. And it will certainly color my opinion on this matter.”

Against that background, Beshar; Gordon Woo, a catastrophist with Risk Management Solutions; J. Eric Smith, president and CEO of Swiss Re Americas; and Janice Abraham, CEO of United Educators, spoke of the importance of TRIA.

Beshar said doubts about TRIA's future “are already affecting the primary insurance market, particularly on the workers' compensation line of business,” as noted last week in comments by Robert Gordon, senior vice president of policy development and research at the Property and Casualty Insurers Association of America.

Beshar said there are “indications that carriers are negatively reacting to TRIA renewal uncertainty by non-renewing insureds with large employee ccumulations in major urban cities.”

Beshar sought to address the skepticism voiced by Hensarling and other conservatives on the panel by suggesting ways that the program could be modified to reduce government exposure.

For example, he said the company deductible could be increased, hopefully incrementally, from 20 percent, which he said would be consistent with the growth in property and casualty industry's surplus; increase the industry's industry aggregate loss trigger from $100 million to $1 billion, also over time; and potentially increase insurers co-participation from 15 percent to 20 percent or more.

He also suggested that the program be reauthorized for 10 years, that Congress specifically clarify during the reauthorization process that coverage should be provided by TRIA for all forms of terrorism (i.e., conventional and Nuclear chemical biological radiation (NBCR) if coverage is afforded on the primary policy.

For instance, Beshar said, “there is ambiguity” in the market currently as to whether TRIA covers workers' compensation in the event of an NBCR-related act.

He also said a reauthorized TRIA should clarify that it address cyber terrorism, which he called a “new terrorism risk.”

Go to next page to see more comments on TRIA…

Leigh Ann Pusey, president and CEO of the American Insurance Association

“Terrorism is a unique risk that remains uninsurable without the successful partnership provided by TRIA. The program provides the necessary stability and certainty to prevent economic disruption while providing for an orderly recovery following an event. It is due to TRIA that terrorism risk insurance is widely available today.

“TRIA enables insurers to cover this intentional man-made risk that defies predictability. Unlike natural catastrophes, where the industry can leverage scientific information dating back hundreds of years, only the government has access to the critical information insurers would need to underwrite this unique risk. There is simply no way for insurers to gauge the frequency, location and means used to carry out terrorist attacks, which are intentional events largely controlled by the terrorists themselves. Similarly, because terrorism is a dynamic and interdependent risk, the benefits of individual mitigation efforts are diminished.

“While AIA welcomes the debate on whether TRIA is the best long-term solution for managing terrorism exposure, its first 11 years have been highly successful.”

Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Cos.

“For over a decade, the risk-sharing mechanism created by TRIA has ensured our national and economic security at virtually no cost to the taxpayers. Allowing this program to expire or materially altering the trigger or deductibles would lead to higher costs for the insured and less coverage in the market, which increases the ultimate burden on taxpayers.

“We saw after 9/11 what kind of damage to the economy is possible. Many lenders require terrorism coverage, and without TRIA that financing would dry up, causing development projects to grind to a halt and costing thousands of jobs. This happened in the immediate aftermath of 9/11 and was one of the main reasons TRIA was created in the first place.”

Martin DePoy, spokesman for The Coalition to Insure Against Terrorism

“Numerous studies, including studies by the President's Working Group on Financial Markets, the Government Accountability Office (GAO) and, recently, the global insurance brokerage and risk management firm Marsh, have highlighted the unpredictable nature of terrorism and why insurers cannot reliably model for this exposure. A new study by the global reinsurer Swiss Re concludes that terrorism remains 'uninsurable by private markets'. All available evidence continues to indicate that private terrorism risk coverage would once again disappear without the Terrorism Risk Insurance Program.

“Recent events, including this spring's deadly Boston Marathon bombings, have clearly demonstrated that the threat of terrorism is still very much with us. TRIA is as necessary today as it was in the wake of the 9/11 attacks.