THIS SEARCH     THIS DOCUMENT     THIS CR ISSUE     GO TO
Next Hit        Forward           Next Document     New CR Search
Prev Hit        Back              Prev Document     HomePage
Hit List        Best Sections     Daily Digest      Help
                Contents Display

[Page: S2387]  GPO's PDF
---

   Mr. NELSON of Florida. Madam President, I wish to speak about truth in politics. Some people would say that is an oxymoron, but it is very much needed in this town. Truth in this town often gets mixed up with the excessive political partisanship that starts to raise its head when the hot contest on an issue arises, and one such issue arose yesterday. The President took a swipe at the majority leader of the Senate over the fact that the majority leader was not bringing up legislation on terrorism insurance when, in fact, if my memory serves me correctly, in the closing hours before the Christmas recess, it was the majority leader who brought up the terrorism insurance bill, and it was objected to by the minority leadership, specifically the senior Senator from Kentucky.

   Then yesterday, the Senator from Nevada offered a unanimous consent request to bring up the terrorism insurance bill, and it was objected to by the minority leadership of the Senate.

   I wish we would get our facts correct about who is doing what to whom and who is trying to bring legislation out to the floor of the Senate. The fact is that the majority leader, as a number of Senators, thinks there is a legitimate problem as a result of September 11 with regard to being able to insure high-value structures in uncertain times of terrorism . Therefore, to keep the engines of commerce properly oiled and lubricated, the commodity that is often misunderstood, known as insurance , needs to be provided.

   If we are successful in getting the parties to come together and the legislative branch and the executive branch of Government to come together on a bill--this particular legislation that is being talked about has a gross omission; and that is, the consumer needs to be protected from the rates being jacked up so high using terrorism as an excuse. In fact, that is what we are already beginning to see. We are seeing the rates of a number of liability, property, and casualty policies going through the roof as a result of the uncertainty of the climate set about by terrorism .

   There is an easy way to handle that, and if this body does get together on a terrorism insurance bill, then clearly it ought to have the protection that, first, the premiums collected for terrorism insurance not be mixed with the premiums collected for liability, fire, theft, slip and fall, and other activities. Why? If an insurance company needs to charge an additional amount for terrorism , and there is no experience or data save for the September 11 experience, we need to know how much is being charged so that the insurance commissioners of the 50 States will be able to build some data and see clearly whether or not the amount of a premium being charged is, in fact, actuarially sound to support the threat of future insurance losses from terrorism .

   The commissioners need data and they need experience and the only way, from an accounting standpoint, they can accurately measure that is the premiums for terrorism insurance are kept separate from all other premiums for the normal property and casualty insurance cost.

   A second provision that is absolutely essential for the protection of the consumer is that there be a cap on the amount the premium can be raised. Instead of these gargantuan rate hikes that are now occurring--some double and triple the amount that businesses have paid in the past--there could be a much more modest rate hike. If that is not enough or if that is too much on the basis of the experience--in other

   words, the payout for terrorism losses in the future--the insurance commissioners of the 50 States will be able to have a record they can then figure out whether that is too much or too little.

   Instead of taking advantage of the trauma of the climate of September 11, we ought to put a cap in any legislation we pass on the amount the rates can be raised by insurance companies.

   Mind you, even though we think this is applicable just to large buildings, football stadiums, or public places that might be on a target list of terrorists, just wait. We are going to see in neighborhoods that happen to be near a nuclear plant the rates for homeowner insurance policies and automobile insurance policies jacked up; thus, all the

[Page: S2388]  GPO's PDF

   There is a third protection of the consumer that must be included in any legislation the Congress passes, and that is the prevention of redlining or, in other words, the prevention of saying: I am going to give you terrorism insurance , but I am not going to give you terrorism insurance . In other words, there has to be a mandatory obligation that all policies be able to have the terrorism coverage.

   Those three particular points of protection of the consumer must be in legislation that comes out of the Senate and was suggested by the White House yesterday but with no details: Point No. 1, separate the funds from an accounting standpoint so we know how much is going in to the insurance company for the terrorism risk; No. 2, cap the amount initially that can be raised until some experience can be built up and data is available to see if the rate being charged for the terrorism risk is actuarially sound; and, No. 3, have a requirement that there be the mandatory coverage of the terrorism risk so that there cannot be cherry-picking, saying: We will cover you, but we will not cover your policy.

   Then the public of America would be well served.

   I yield the floor.

   The PRESIDING OFFICER. The Senator from Maine.

   Ms. COLLINS. Madam President, I ask unanimous consent that I be permitted to proceed for 5 minutes.

   The PRESIDING OFFICER. Without objection, it is so ordered.

   Ms. COLLINS. I thank the Chair.

   (The remarks of Ms. COLLINS pertaining to the introduction of S. 2077 are located in today's RECORD under ``Statements on Introduced Bills and Joint Resolutions.'')

THIS SEARCH     THIS DOCUMENT     THIS CR ISSUE     GO TO
Next Hit        Forward           Next Document     New CR Search
Prev Hit        Back              Prev Document     HomePage
Hit List        Best Sections     Daily Digest      Help
                Contents Display