Advocates of the decade-old terrorism insurance backstop say they expect a battle over legislation that would extend the federal program for five years.

Led by Reps. Michael Grimm, R-N.Y., and Carolyn Maloney, D-N.Y., a bipartisan group of lawmakers introduced the Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013 earlier this month.

H.R. 508 would extend the program through Dec. 31, 2019, from its Dec. 31, 2014, expiration and make no changes to the program.

Risk managers and insurers supporting the program established in 2002 in response to the Sept. 11, 2001, terrorist attacks on New York and elsewhere hailed lawmakers for introducing the bill so early in the session.

If it becomes law this year, market uncertainties likely to emerge before 2014 as underwriters struggle with insurance policies that may or may not enjoy government backing in the event of a catastrophic terrorist attack could be avoided.

However, supporters also say there is no guarantee that the program will be extended in its current form or another.

“The extension of TRIA has been a standing priority for RIMS and it was great to see its introduction so early in the year,” said Carolyn Snow, secretary and board liaison to the Risk & Insurance Management Society Inc.'s Government Affairs Committee.

“The longer the TRIA extension remains ignored, the more unstable the insurance market will become,” said Ms. Snow, who also is director of insurance and risk management at Humana Inc. in Louisville, Ky. “Businesses across the country face a real risk of loss as a result of terrorism. Many private insurers are still unable to calculate this exposure and provide the necessary coverage. This makes a federal terrorism backstop crucial to the sustainability of corporate America.”

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“This is a first step, and an important debate will occur,” said Nat Wienecke, senior vice president of the Property Casualty Insurers Association of America in Washington. “To the extent this puts (an extension) closer to the front burner, we see that as favorable.”

“The introduction of the bill is significant because it starts the debate in a Congress that is prone to waiting 30 minutes before each deadline on each piece of major legislation they consider,” said Jimi Grande, senior vice president in the Washington office of the National Association of Mutual Insurance Cos. “In the case of TRIA, every day they go into 2014 tends to cause market unease and disruption.”

But he and others foresee considerable challenges ahead.

“This is the opening of what promises to be a long and thorny debate,” said Mr. Grande. “It is incredibly important that Rep. Grimm got it started so early.”

Advocates also say the program could be changed.

For example, an internal House Financial Services Committee document, says the panel will monitor the program “for its ongoing impact on economic development and the private terrorism insurance marketplace.” The panel “will examine the private sector's capacity to assess and price for terrorism risk” and “may consider proposals” that would phase out the program “by encouraging private industry to develop dedicated capital for underwriting terrorism risks, and significantly reducing the potential federal exposure and participation in terrorism insurance over time.”

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Joel Wood, senior vice president of the Council of Insurance Agents & Brokers in Washington, said Rep. Randy Neugebauer, R-Texas, the chair of the Financial Services Committee's Subcommittee on Housing and Insurance, has said that he understands that “this is as much if not more of a 2013 issue as a 2014 issue,” and that he recognizes the uncertainty could be disruptive to corporate consumers.

“It has been somewhat challenging in recent months to talk about TRIA on Capitol Hill when everybody perceives this to be an end-of-2014 issue,” he said.

Mr. Wood said industry lobbyists agree there “are obviously no guarantees for a straight extension. It is going to be an uphill challenge.” Insurers will have to do a “much better” job in underscoring to conservatives that the law's recoupment mechanism, which requires insurers to repay a considerable portion of federal support in the event the program is triggered, represents “substantial skin in the game for the industry.”

While early introduction of the bill is “appropriate” recognition of the importance of continuing the program, supporters have to be realistic about severe fiscal issues facing Congress, said J. Stephen Zielezienski, senior vice president and general counsel of the American Insurance Association in Washington.

Reauthorization of TRIA is “probably not top of the priority list now” and there are “very good arguments for continuing the program as is,” Mr. Zielezienski said.

“We all know the program is not a bailout. The industry has a significant stake in the program, being required to cover basically 20% of the costs upfront, which translates into a $30 billion event. If you really analyze the program, it's a shared responsibility program with the industry having a big upfront stake,” he said.