The federal government's terrorism insurance backstop program could be refined in three ways, a Marsh & McLennan Cos. Inc. executive told a House of Representatives committee on Thursday.

The comments came during a hearing before the full House Financial Services Committee that addressed the reauthorization of the program.

The current terrorism insurance program, created by the Terrorism Risk Insurance Act of 2002, is slated to expire on Dec. 31, 2014. Three bills have already been introduced in the House to modify and extend the program for varying amounts of time.

In his testimony, Marsh & McLennan Executive Vice President and General Counsel Peter Beshar reiterated Marsh's strong support of the program.

“In our judgment, the existence of a private terrorism insurance market, backstopped by TRIA, actually serves to protect the government and taxpayers from absorbing virtually all of the financial loss in the event of a terrorist attack,” Mr. Beshar said.

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He said Marsh has three recommendations to refine the program as lawmakers consider its extension. The refinements are:

• Clarification that coverage is provided by TRIA for all forms of terrorism — including nuclear, biological, chemical and radiological events — if coverage is afforded on the primary policy.

• Modernization of TRIA to reflect new terrorist threats that have emerged — in particular, the risk of cyber terrorism.

• Establishment of a 90-day period to determine whether or not an act of terrorism is covered by TRIA.

During the committee hearing, the idea of extending the terrorism backstop appeared to enjoy the favor of many of the committee members and witnesses.

However, the chairman of the committee, Rep. Jeb Hensarling. R-Texas, expressed concerns about the government taking on another potential financial commitment.

“It would probably come as no surprise to anyone that if we posit that private insurance companies are incapable of modeling this risk, how can we be convinced that the federal government is any better, as our National Flood Insurance Program is under water, pun intended?” Rep. Hensarling said.

“As we look at the national debt clock, which I know is inconvenient to some, it principally turns because insurance programs — be they social insurance programs such as Social Security and Medicare or others — the government has not done a particularly good job. That, ladies and gentlemen, represents a man-made disaster. And it will certainly color my opinion on this matter. I have an open mind. It is not an empty mind. It remains a skeptical mind,” he said.

The next hearing on TRIA reauthorization is slated for next week before a Senate committee.