Congress Puts Us All At Risk

Will it really take another terrorist attack to break the political gridlock in Congress and get a federal terrorism reinsurance backstop in place? Unless the political dynamics change in a hurry, that could very well be the case.

The logjam is in the Senate, where tort reform disputes have tied up a bill to provide quota-share reinsurance. The Senate proposal is very different from the one passed by the House late last year, which establishes a loan program. Since insurers need reinsurance, not loan guarantees, to start writing terrorism coverage again, the House bill wont do the trick, but at least they are poised to negotiate a compromise on a final measure everyone can live with.

The Senate "isn"t missing the forest for the trees, theyre missing the forest for the leaves on the trees," lamented Robert Gordon, senior counsel to the House Committee on Financial Services, at a recent meeting of the Casualty Actuarial Society.