Whether or not Washington saw fit to extend the Terrorism Risk Insurance Act beyond its scheduled Dec. 31, 2007 expiration, the fate of the federal reinsurance program had to be considered one of the Top-10 stories impacting the property-casualty industry.

As TRIA's deadline approached and with Congress eager to adjourn for the year, the House and Senate were on a collision course. But when push came to shove, the House blinked and reluctantly agreed to rubber stamp a more modest Senate bill that only adds domestic terrorism to the existing program.

The House had already swallowed hard and agreed to accept the Senate's seven-year extension (rather than 14 years, as in the original House bill), as well as give up any hope of including coverage for nuclear, biological, chemical or radiological attacks.

However, after much public debate and political maneuvering, the House did attempt one last "Hail Mary" pass this month by passing a new bill that would lower the trigger point for federal reinsurance, expand the program to include group life, and include provisions to assure more affordable coverage for high-profile target areas.

Yet even the most ardent supporter in the House for a more comprehensive program--Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee and chief sponsor of the House bill--conceded that if the Senate rejected the House's latest initiative, "we'll have to acquiesce" and settle for the more modest Senate version.

Rep. Frank's tone of resignation was quite a change from when he threw down the gauntlet during a late October speech at the annual meeting of the Property Casualty Insurers Association of America, declaring he would not permit the Senate to bully him into accepting a "take it or leave it" bill as expiration loomed. Yet that is pretty much exactly what happened.

Then again, what choice did Rep. Frank have? TRIA supporters in Congress, the insurance industry and the risk management community had to be thrilled extension was being considered at all, given the open distaste for government involvement in the private market voiced by the White House.

Indeed, even if the House had gotten its way, the victory would have been short-lived, as President George W. Bush repeatedly vowed to veto any TRIA legislation expanding the program beyond what the Senate bill sought.

Had Rep. Frank prevailed and the White House been sent the more expansive House version, would President Bush have actually vetoed a bill with the word "terrorism" in it? Or was he merely bluffing? We'll never know.

To placate Rep. Frank, the Senate version orders the Government Accountability Office to conduct two studies and make recommendations to Congress. One would assess NBCR risks, and the other would examine restraints on the availability of terrorism insurance in vulnerable regions.

That could give Rep. Frank ammunition to seek more changes, as he vowed to press Congress for expansion of TRIA in 2008.

But his prospects of pulling off such a feat are dim, given certain opposition from President Bush, little sense of urgency in Congress thanks to the seven-year extension, and the fact it's a huge election year with control of the White House in the balance. Such a peripheral issue is likely to get crowded out in 2008, although hearings are possible.

Keeping the status quo would be just fine with the insurance industry, with carriers wanting no part of NBCR exposures.

Joel Wood, senior vice president of government affairs at the Council of Insurance Agents and Brokers, said that "if somebody had told me at the outset of the year that the [TRIA] act would be essentially unchanged and extended for that duration, I would have dismissed it as a pipe dream."

Even with TRIA still in place, however, insurers are on the hook for tens of billions should another catastrophic event occur. So much for critics decrying TRIA as a government "bailout."

About the only point everyone in the heated terrorism insurance debate agrees on is that they all hope and pray the need for TRIA is never put to another practical test.

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