Terrorism Bill Critics Are Wrong

With a House-Senate Conference Committee facing a battle over two very different approaches to establish a federal role in terrorism reinsurance, there are a few critical facts that negotiators must consider.

One is that those who insist that insurers should have to repay any federal money they get for terrorism claims do not understand the fundamental goal of insurance, which is to spread the risk. Offering loans to help insurers pay terrorism claims–the foundation of the bill passed by the House–would not draw insurers back into the terrorism insurance market. Insurers need reinsurance, not loans, to be able to write this coverage.

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