Citing concerns that the market is still unable to overcomepotential losses from future terrorist attacks, insurance industryrepresentatives recently testified before House panels that thenational terrorism insurance backstop should be extended beyond itsDec. 31, 2005, expiration date. Eight insurance associationspresented a joint statement at a meeting of the Capital MarketSubcommittee and the Oversight and Investigation Subcommittee ofthe House Financial Services Committee urging Congress to extendthe program.

Problems could arise with insurance contracts that will benegotiated in late 2004 and, therefore, extend beyond TRIA'stermination date, the American Insurance Association believes.“There is strong consensus among state insurance regulators, theinsurance industry, and commercial policyholders that continuationof the federal backstop for terrorism insurance is essential,” saidEric Goldberg, assistant general counsel for the AIA. “There alsois strong consensus that, due to insurance and business cycles,reauthorization cannot wait until shortly before the statute'sscheduled expiration at the end of next year. Congress must takeaction in 2004 in order to avoid the kind of market dislocationthat was so destabilizing prior to the law's initial passage.”