Terrorism backstop top priority in 2007

First things first. When it comes to the federal legislative agenda concerning risk management, the first thing has to be reauthorization of the federal terrorism insurance backstop.

And we're not alone in that contention, either. As we report on page 4, dealing with the terrorism insurance issue is the American Insurance Assn.'s priority for the new Congress as well. It's easy to see why.

The federal terrorism insurance program will expire next Dec. 31 unless Congress extends it, or—preferably—replaces it with a permanent public/private mechanism to help guarantee that losses from future catastrophic terrorist attacks don't go uncovered. The new leaders of both committees with jurisdiction over the issue have promised to move quickly on the issue, but even the best intended congressional schedules can be thrown out of kilter by outside forces.

Only continued emphasis on the importance of maintaining the backstop by risk managers, insurers, producers and the business community as a whole can keep the issue in the priority position it deserves. Even then, finding a real solution to this very real problem won't be easy, at least as long as the administration—once one of its most fervent supporter—continues to question the need for the backstop.

As the AIA says, this should be the first order of risk management and insurance-related business considered by Congress next year. And swift passage and enactment will mean that supporters of the backstop will be looking toward a Happy New Year, indeed, this time next year.