Oxley, chairman of the House Financial Services Committee, set a drafting session for Sept. 29 to complete the bill, which insurers have lobbied for.
Under the Terrorism Risk Insurance Act, enacted after the Sept. 11 terrorist attacks in New York and Washington, the federal government acts as a reinsurer for terrorism losses.
The program expires at the end of 2005, and the insurance industry has told Congress it isn't ready to bear the full burden of losses such as those it incurred in 2001.
Insurers have urged Congress to act this year, saying companies are beginning to write policies that extend past the deadline, and that they and their customers need to know if the federal backstop will remain. Without terrorism insurance, many construction projects and other enterprises will stall, insurers have said.
The industry released a study Tuesday saying that the U.S. gross domestic product would decline by about $53 billion, and some 326,000 jobs would be lost, if the program isn't renewed.
Oxley met with industry officials Wednesday, and there is bipartisan support for extension. He wants to extend the program until Dec. 31, 2007, the newspaper reported. Insurers would have to make terrorism insurance available to commercial policyholders during that time.
Insurers would bear an increasing burden of risk during the extension. They would pay a deductible of 15 percent of losses as they do now, for the fourth year of the program. The deductible would rise to 20 percent for the fifth year, to phase out the program.
The Treasury Department would be asked to decide if the federal backing should apply to life insurance policyholders as well as property. The Treasury also would be required to offer plans to keep terrorism insurance available without federal government backing.
The Senate also has a terrorism insurance renewal bill, introduced by Senator Christopher Dodd, a Connecticut Democrat. Action may not come in that chamber this year.
