WASHINGTON (BestWire) — Insurers, brokers and commercial policyholders hope the third time's the charm when it comes to US House efforts to extend the federal terrorism insurance backstop beyond its scheduled December 31 expiration.

By a 360-53 margin, House members voted late on Tuesday to approve a seven-year extension of the Terrorism Risk Insurance Program, created in the aftermath of the September 11 attacks to provide $100 billion in reinsurance capacity for terror-related commercial property/casualty risks.

Martin DePoy, steering committee coordinator for the commercial policyholder-focused Coalition to Insure Against Terrorism, opined that, without the backstop, "a great many policyholders across a broad range of industries would have found themselves uninsured against the risk of terrorist attack," noting in particular that "investment in development projects would have been curtailed, with damaging effects to the broader national economy."

The vote follows two prior attempts by the House — the first in September and the second earlier this month — to authorise a long-term extension of the program. Though both efforts passed by wide margins, they each were subject to veto threats from the White House, which objected to language adding group life insurance to the backstop and lowering the program's "trigger" level, among other provisions.

In the most recent vote, the House took up legislation that mirrors a version passed by the Senate last month. The bill would eliminate the current program's distinction between foreign and domestic acts of terrorism, but otherwise keeps the program intact under roughly its current terms through 2014.

Nonetheless, several House members took some parting shots at the colleagues in the Senate for failing to schedule a conference committee to find compromise between the two chambers' approaches. Rep. Gary Ackerman, raised particular concern about the chamber's failure to consider his proposal for a "reset" mechanism, which would offer lower trigger levels and company deductibles in areas hit by very large terrorism losses.

"In the Senate's fantasy world, the $30 billion in insured losses from 9/11 can be easily underwritten and capitalised, because unimaginable losses — such as those that would come from an attack with weapons of mass destruction — just can't happen. And the reason they can't happen is because the US Senate said so," Ackerman said from the House floor.

Ackerman announced that he would be introducing stand-alone legislation, dubbed the Terrorism Risk Insurance Improvement Act, that would look to add the reset mechanism to the TRIA program.

"Santa Claus is not going to give America terrorism risk insurance for Christmas and we don't live with the Easter Bunny in the Senate's candy-land, where catastrophic risk can be comfortably ignored. Saying 'the market will provide' doesn't make it true," Acker But with Congress set to recess tomorrow, most industry sources were pleased simply to get a deal done prior to the program's expiration. Marliss McManus, senior federal affairs director with the National Association of Mutual Insurance Companies, argued that "given the dynamics of the Senate and the Bush administration, I think this was a really good bill."

"At the end of the day, if we were to have the perfect bill, we definitely would have kept the $50 million trigger, but the great thing is that they kept the trigger at the current level — the $100 million level — and don't ratchet it up over the next seven years," McManus said.

American Insurance Association president Marc Racicot noted that the seven-year extension would help "remove the risk, uncertainty and instability in the market and will foster long-term investment and economic growth."

Congress previously passed a two-year extension when the original Terrorism Risk Insurance Act expired in 2005.