WASHINGTON — The potential economic consequences of failure to extend the federal terrorism insurance backstop program should be “an impetus for quick congressional action,” according to report released Tuesday by Marsh L.L.C.

The program, which was created by the Terrorism Risk Insurance Act of 2002, is a “model public/private partnership,” Marsh & McLennan Cos. Inc. President and CEO Daniel Glaser said during a Capitol Hill briefing on the report and the program on Tuesday.

Mr. Glaser said the discussion has passed over whether the program should be extended — it is slated to expire on Dec. 31 unless Congress acts — but rather how it should function in the future.

Three competing bills dealing with program have been introduced in the House, and a bipartisan measure that would extend the program for seven years was recently introduced in the Senate.

Marsh's “2014 Terrorism Risk Insurance Report” found that the takeup rate for terrorism insurance in 2013 was 62%, unchanged from 2012. If the program is not extended, and insurers do not have to make the coverage available, lower takeup rates could result as fewer insurers offer the coverage, according to the report.

The report added that increased pricing, particularly for properties in major metropolitan areas, could also follow.

Duncan Ellis, Marsh's U.S. property practice leader, said the standalone terrorism insurance market is “finite and insufficient” as a replacement for the federal program.

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“The strongest argument for extending TRIA is, frankly, that it works,” said Ed Walters, president and CEO of Host Hotels & Resorts Inc., who appeared at the briefing on behalf of the Washington-based Coalition to Insure Against Terrorism.

The report added that the current authorization discussion on Capitol Hill “presents an opportunity for Congress to clarify” that the program will respond and apply to acts of cyber terrorism falling under covered lines “provided that statutory prerequisites are met.”

“Such clarification could be instrumental in providing stability in the event of a cyber-terrorist attack that results in catastrophic damage,” it said.

The report concluded that if the program is allowed to expire or is materially changed, policyholders “likely will experience a volatile market with increased pricing and limited availability.”

“The potential for adverse economic consequences due to limited or unavailable terrorism insurance should be an impetus for quick congressional action” to reauthorize the program, said Marsh.