WASHINGTON--A Democratic lawmaker, a White House official and a Republican Senator made comments today revealing persistent differences over whether to provide a permanent government support for terrorism insurance.

Their conflicting viewpoints were aired at the Networks Financial Institute's Annual Insurance Reform Summit.

Rep. Barney Frank, D-Mass., said that the House will pass a bill in April extending the federal Terrorism Risk Insurance Act, which provides a backstop for insurers in the event losses from a terrorism attack hit certain threshold levels.

He said the House TRIA legislation "will include group life" as well as nuclear, chemical, biological and radiological attacks. The House bill will also remove the specification in the current program that only attacks by foreign-based terrorists will trigger federal involvement in covering damages.

The terrorism risk issue, he said, is a case of "market failure," adding that he meant it not in the sense that the market acted badly, but in the sense that it cannot adequately provide coverage on its own.

"The market was not designed to deal with these criminal acts," he explained.

Discussing TRIA, Sen. John Sununu, R-N.H., issued a caution against making the program permanent or expanding it unduly.

Although acknowledging that it "is likely that we'll have an extension this year," Sen. Sununu added that lawmakers should remember why they made the TRIA program temporary in the first place, and they should look at extending the program with the view of how to best help the private market assume terrorism risk.

"We shouldn't take action that would preclude a private market from ever developing," he said.

Sen. Sununu is a member of the Senate Banking committee, and his comments run counter to statements made by the panel's chairman, Sen. Chris Dodd, D-Conn., who has said in the past few months that he would like the TRIA program made permanent.

However, Sen. Sununu's vision for TRIA does apparently mesh with that of the Bush Administration. Allan Hubbard, an assistant to the President for economic policy and a director of the National Economic Council, said that the Administration favors continuing to "phase out" federal involvement in the terrorism risk market.

The White House strongly supported increasing the burden of terrorism risk on insurers through higher co-payments and deductibles as part of the 2005 TRIA extension legislation, Mr. Hubbard said.

He added, "The President believes that in the long run, TRIA is not needed." The current measure is due to expire at the end of the year.

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