The boss of the world's biggest insurance company has warned of widespread economic disruption in the US without terrorism cover.
Maurice `Hank' Greenberg, chairman of AIG, said legislation was needed to stop insurers withdrawing terrorism cover from their policies, it was reported.
AIG is the world's largest insurer by market capitalisation.
About 70 per cent of commercial insurance in the US is renewed next month.
The industry has warned it will withdraw terrorism cover because it can no longer calculate the risks.
Full insurance is often a condition of bank loans in economic sectors such as aviation, construction, property and leisure.
Greenberg said only a quarter of renewals normally completed by now had been settled.
"If there's nothing concluded in Washington by 31 December, companies will be renewing without terrorism.
"On January 1 you're going to see contractors and banks saying that all the loans they made may have had their covenants breached by not having full insurance.
"It will cause disruption... That becomes an economic problem, not an insurance problem."
Discussions continue to be held on possible legislation to help businesses with terrorism cover.
