Senate Panel Pencils TRIA In For March

Meanwhile, Aon Corp., Chicago, has issued a report arguing that TRIA must be extended.

"After a fairly chaotic introduction, TRIA ? with a few exceptions ? has largely fulfilled its short-term public policy goal of creating a readily available supply of terrorism capacity at affordable prices," Aon experts write in the report. "Even with substantial net insurer retentions, TRIA has clearly benefited market capacity and pricing."

Analysts at the Congressional Budget Office recently suggested that scaling back TRIA might reduce total losses in the event of an attack, by encouraging companies to do more on their own to prepare for an attack.

The authors of the Aon report question that conclusion.

"The long-term picture for the terrorism risk market remains as unclear as the risks it insures," the authors of the Aon report write. "No viable alternative funding mechanisms for this risk have emerged from the capital markets or from private market pooling arrangements."

Recent studies by the Government Accountability Office and the American Academy of Actuaries, Washington, acknowledge the difficulty of relying on private means to reducing losses resulting from terrorist attacks, according to the Aon report.