Congress would be doing the nation an economic injustice ifit fails to renew an federal backstop for terrorisminsurance, Rep. Michael G. Oxley, R-Ohio, told an insuranceindustry meeting this week.

"It would be a travesty of enormous proportions for our economyshould we not be able to extend TRIA," he told an audience ofinsurers and reinsurers at the annual meeting of the PropertyCasualty Insurers Association of America (PCI) in Chicago..

The terrorist attacks of Sept. 11, 2001, he noted, "did morethan murder thousands of people. The attacks drained the insuranceindustry's surplus and threatened both marketplace solvency and ourcountry's economy."

Mr. Oxley, who chairs the House Committee on Financial Services,continued that insurers began to non-renew commercial coverage "andlarge policyholders were unable to obtain insurance for theirconstruction and development projects."

In response, TRIA was developed as a terrorism backstop by theFinancial Services Committee six weeks after the attacks–less thanthree months later the House enacted TRIA, he said.

Mr. Oxley said TRIA was designed to be a short-term, temporaryfix to address specific problems in the immediate aftermath of theattacks on 9/11. TRIA "succeeded in stabilizing the markets; nowindustry is seeking to extend that program," he observed.

Last year, he said, the committee passed a TRIA extension billand continues to work with interested parties toward potentialcompromise legislation that could be enacted before the programexpires this year.

He said he had made a personal pledge when Treasury SecretaryJohn Snow testified before his committee, "that our committee and Iare totally committed to reauthorizing TRIA." He noted thatSecretary Snow has taken a personal interest in TRIA.

He added that he is working with the U.S. Treasury, the WhiteHouse and the Senate "to make certain that we don't leaveWashington for the holidays until we have passed a TRIA extension.I'm not sure what the details are going to be, but it would be atravesty of enormous proportions for our economy should we not beable to extend TRIA."

One of the concepts being discussed, creating a pooling ormutual reinsurance facility, he said, would allow dedicated privatecapital for terrorism risk to accumulate over time and graduallyreduce the federal backstop.

Mr. Oxley praised PCI, saying it has been "at the forefront ofthe terrorism debate," working closely with the committee on TRIA."This groundwork will pay dividends this year and in the future asprogress on terrorism insurance reform continues," he said.

One concept that must be included in the House bill, he noted,is full taxpayer protection. The current program only containspartial taxpayer repayment provisions, he said. "Taxpayerprotection is very important to me and the House leadership, andfull payback provisions will be incorporated in any new terrorismlegislation," Mr. Oxley said.