WASHINGTON (Reuters) — The incoming chairman of a key US Senate committee said yesterday he wants to take early action on a permanent solution to insuring terrorism risks rather than another temporary fix.Connecticut Democrat Sen. Chris Dodd, who is expected to become chairman of the Senate Banking Committee in January, told reporters he does not favour further extension of a programme in which the government acts as insurer of last resort if private insurers cannot handle massive terrorism damages. The programme expires at the end of 2007.

“It’s an issue we’d like to see if we can get something done early, if we go with some sort of a permanent proposal,” said Dodd, whose state is home to many insurers.

“I don’t want to go through another extension,” he said.

After the September 11, 2001 attacks, which caused insured losses of $32.5 billion, Congress approved the temporary program known as the Terrorism Risk Insurance Act (TRIA). It has been extended once already and some business lobbyists want another extension.

A study from Congress’ investigative unit said in September that financial losses from nuclear, biological, chemical or radiological terrorist attacks are not insurable, and it is unlikely the private market would ever expand to cover them.

The Government Accountability Office’s findings were immediately seized upon by insurers who want the government to take a permanent role.

A Bush administration group on financial issues issued a report in the same month that said the federal program was hampering development of private-sector terror insurance.

“The earlier we can draft something ... that will bring people together, I’d like to see us try and achieve that,” said Dodd, who will replace Alabama’s Richard Shelby as committee chairman when Democrats take over both the Senate and House.

The American Insurance Association, a trade group, wants the federal government to provide a broad safety net for losses from all types of terrorism attacks.

The Real Estate Roundtable, which represents commercial property owners such as hotel chains, favours a European-style approach that would have insurers pay premiums to create a private insurance pool. If the pool’s assets run out, the government would step in to cover claims.