Terrorism Insurance Law Faces Opposition From Bush.(George W. Bush)

Washington -- The Bush administration is calling for a scaled-backed extension of a federal terrorism insurance program that is due to expire at the end of this year.

In a letter to Congress, Treasury secretary John Snow said the administration opposes an extension of the Terrorism Risk Insurance Act in its current form.

"It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding innovation and capacity building," secretary Snow says in the letter that accompanies a study of the availability and outlook for private terror insurance.

The Coalition to Insure Against Terrorism blasted the Treasury study. "The study's assertion that the now-partial presence of reinsurers will somehow grow stronger in the absence of a federal backstop defies logic," the coalition said.

The coalition of financial and real estate interests along with business insurance policyholders pushed for enactment of a backstop federal reinsurance program following the Sept. 11, 2001 terrorist attacks.

"The Treasury study does not present an accurate picture of the current terrorism insurance marketplace and fails to acknowledge that the risk of terrorism is unknowable," CIAT said.

The Commercial Mortgage Securities Association said the availability of terrorism insurance is essential for the "continued vibrancy" of the commercial-mortgage backed securities market and commercial real estate investment.