Agreement Reported On Terrorism Insurance
NU Online News Service, Oct. 17, 5:15 p.m. EST--A tentative agreement was reportedly reached by the White House and U.S. House and Senate leaders late this afternoon in support of a federal terrorism reinsurance bill.
"We are anxious to see the final details in writing, but from what we understand, this is truly an unselfish compromise that puts concern for the overall good of our nation, the economy and jobs ahead of political differences," said Rodger Lawson, president of the Alliance of American Insurers in Downers Grove, Ill.
"I would call this an historic piece of legislation that shows a clear understanding and appreciation of the realities facing the domestic insurance industry in the post 9/11 era," he added.
"Everyone agreed that a federal program for terrorism reinsurance was vital, but overcoming philosophical differences on certain provisions of the competing bills was far from easy," said David Farmer, senior vice president for federal affairs at the Alliance. "We appreciate the willingness of all those involved to do the right thing, and we think the final bill will be one we can all be proud to support."
Mr. Farmer said indications that the bill will include provisions for covering workers' compensation claims related to terrorist attacks are an important addition to the compromise.
While details of the final bill are still being finalized--including how bitter disputes over tort issues were resolved--the agreement calls for a program that will provide a federal reinsurance backstop through 2005, the Alliance reported. Insurers will cover a certain percentage of losses from any future terrorist attacks, and the federal government will provide additional coverage for large losses.
Action is expected on the bill next week and the House, which has already recessed, will return for a special session next Wednesday to vote on the final bill, according to the Alliance.
Not everyone is thrilled with the news, however. The Consumer Federation of America expressed concern that the legislation would leave taxpayers liable for billions in losses that the insurance industry could afford to repay.
CFA also charged that the legislation would likely reduce incentives for insurers to require additional security measures, and impede the development of the private terrorism insurance market.
"This agreement will likely do far more for the insurance fat cats than the working hard hats," said J. Robert Hunter, director of insurance for the Washington-based CFA. "Instead of helping the relatively few businesses that can't get terror coverage, Congress is poised to give away reinsurance to a rich and politically powerful insurance industry."
For further details on the terrorism bill compromise, check "Hot News" at www.NationalUnderwriter.com.
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