The Democratic Governors Association has called upon Congress to reauthorize the federal government's terrorism insurance backstop program immediately “with as few changes and for as long a period as possible,” according to a report issued by the group Thursday.

The program, which was created by the Terrorism Risk Insurance Act of 2002, is slated to expire on Dec. 31. “The uncertainty surrounding TRIA's reauthorization is already impacting state regulators, businesses and insurers nationwide,” said the Democratic Governors Association in its report, “Why Reauthorizing the Terrorism Risk Insurance Act Is Important for States.”

Several bills that would extend the program have been introduced on Capitol Hill. But although hearings have been held on the issue, no legislation has come to a vote.

“By having a plan in place that covers and adjusts claims arising from a terrorist attack, the federal government creates a level of certainty that better serves taxpayers and policyholders impacted by terrorism,” according to the report, which holds that the private insurance market cannot provide terrorism insurance coverage at the level needed by businesses without the federal backstop.

“Democratic governors are strongly encouraged to ask Congress to act immediately to reauthorize TRIA, with as few changes and for as long a period as possible,” said the report.

The report drew praise from the American Insurance Association.

“AIA commends the Democratic Governors Association for its work on this report and its efforts to support TRIA's reauthorization,” said Joe DiGiovanni, senior vice president of state affairs for Washington-based AIA in a statement. “The report illustrates why maintaining a stable terrorism risk insurance market is of critical importance to states' economies.”

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The DGA report was issued the same day as the RAND Corp. issued a report saying the failure to reauthorize the program could have a negative impact on national security.

The DGA report is available here.