You would think that renewing federal reinsurance protection for terrorism risks in the short term, and establishing a permanent backup facility of some sort for the long run, would be a no-brainer, given the potential severity and lack of predictability of the exposure involved. But then again, there is so little common sense, guts or political will in Washington these days that it's no surprise Uncle Sam is again considering leaving the insurance industry in the lurch on this horrific risk once the Terrorism Risk Insurance Act expires at the end of next year.

The last week of September was consumed with reports, hearings and press conferences about whether the feds need to keep providing some sort of reinsurance backstop. I've never heard so much debate about an open-and-shut question. The country needs federal insurance protection in the "war" on terrorism, period!

As expected, the report on terrorism coverage by the President's Working Group on Financial Markets basically indicated that TRIA was never meant to be permanent and the private market should be able to handle such risks on its own. That's about as untenable as White House contentions that the war in Iraq has not worsened the risk of us facing another terrorism attack!