Many insurers–perhaps too eager for a long-term extension of the federal reinsurance backstop provided by the Terrorism Risk Insurance Act–have signed off on a proposal in Congress to force the industry to cover not only "conventional" events (if you could call flying jets into buildings "conventional"), but potentially far more devastating nuclear, biological, chemical and radiological attacks as well. I think that's a huge mistake, both philosophically and economically.

I'm as eager as anyone for passage of H.R. 2761the Terrorism Risk Insurance Revision and Extension Act of 2007–hopefully for the 10 years called for in the bill, regardless of President George W. Bush's short-sighted insistence on a shorter-term renewal (covered in my last blog entry of June 21.)

However, I think it's a huge leap to say that even with TRIA's backup, the insurance industry is prepared to take on the added exposure of an NBCR incident. Before they jump into this with both feet, they should think twice about the massive worst-case scenario they are talking about absorbing here.