In times of terror scares, insurers need assurance.

Things are heating up in the quest to extend the Terrorism Risk Insurance Act (TRIA), which mandates that insurers provide terrorism coverage for their policyholders. Also supplying a governmental backstop for the insurance industry so as to prevent its economic devastation in the event of a catastrophic terrorist attack, TRIA is currently set to expire in 2005.

Heavily lobbied by the insurance industry and the Coalition to Insure Against Terrorism - which includes BOMA and several other real estate associations - both the House of Representatives and the Senate have indicated bipartisan support for TRIA's extension and have introduced three bills that would carry the act into 2007.

Although the extended future of governmental backing for terrorist coverage beyond proposed extension remains both unclear, many feel that the incidence of terrorism in the United States and abroad in the time between now and 2007 will determine the government's role.

"Ultimately the answer comes down to how much terrorism we see between now and then," said Robert Reville, the director of the Institute for Civil Justice at the Rand Corporation, a not-for-profit firm currently conducting multiple studies on terrorism's implications, frequency and predictability. "One might imagine that if we don't see terrorism between now and then, there certainly will be less political will to keep a permanent program in place."

But as long as off-shore re-insurers continue to be wary of insuring the insurers, government backing may be necessary.

"That's the problem, the re-insurers have been unwilling to come back in," said Martin L. DePoy, vice president for government relations at the National Association of Real Estate Investment Trusts, a member Of CIAT. "The re-insurers have said all along they don't know what the frequency or the magnitude of these losses could be and that they aren't willing to go in until they have some kind of data or gauge."

Rand is trying to provide such information and will issue a preliminary study entitled "Issues and Options for Government Intervention in the Terrorism Market place" in early September, the first of a number of upcoming research documents studying TRIA and terrorism. In the fall, Rand will publish another study, examining three different kinds of terrorist attacks, including a 9/11 style attack and its potential result in the current environment under TRIA. Eventually the firm hopes to create a report which examines predictive indicators for terrorism; the kind that would allow the insurance industry to quantify the threat and consequently provide coverage. But even Reville admitted that a study of that nature would be highly controversial and far from definitive. Some feel that, like in Israel, Spain and Northern Ireland--countries that have dealt with numerous terrorist attacks--government intervention is essential.

"We really need TRIA to stay in place even beyond 2007," said Roberta McGowan, executive director of BOMA/NY. "There is really no alternative right now. It would be too much of a financial hardship and I don't know what building owners would be able to do without it."

Whatever the eventual decision, in the meantime proponents of TRIA say the proposed extension will give lawmakers a necessary chance to deliberate.

"The best thing to do is to extend the program and get two more years of data," said Gary Karr, director of federal media relations at the American Insurance Association. "Congress can have extra time to evaluate the program and decide what kind of policy we ought to have."