You would think that renewing federal reinsurance protection forterrorism risks in the short term, and establishing a permanentbackup facility of some sort for the long-run, would be ano-brainer, given the potential severity and lack of predictabilityof the exposure involved. But then again, there is so little brainpower, guts or political will in Washington these days that it's nosurprise Uncle Sam is once again considering leaving the insuranceindustry in the lurch on this horrific risk.

The entire week was taken up with studies, hearings, pressconferences and public statements about whether or not the federalgovernment needs to provide some sort of reinsurance backstop forterrorism risks beyond TRIAs expiration at the end of next year.Ive never heard so much debate about what appears to me to be anopen-and-shut question. The country needs federal insuranceprotection in the “war” on terrorism, period!

The word on the street is that the report on terrorism coveragebeing prepared by the Presidents Working Group on FinancialMarketsdue out Saturday, after Congress goes home to campaign, sono one will hear about it or pay much attentionwill somehowconclude that the private market can handle terrorism risks on itsown.