SECTION: LOGISTICS; Pg. WP

LENGTH: 319 words

HEADLINE: Bush signs terror insurance measure

BYLINE: THE JOURNAL OF COMMERCE ONLINE

BODY:
WASHINGTON -President Bush on Tuesday signed a bill to shield the insurance industry from catastrophic costs of future terrorist attacks. The government will cover the costs of terrorism disasters for the next three years. During this time, taxpayers would have to cover up to 90 percent of insured losses from major attacks, with the insurance industry covering up to the first $15 billion in annual claims, news agencies reported. Any claims less than $5 million would not be paid by the government. The bill mandates insurance companies to pay a deductible in 2003 that equals 7 percent of the premiums they received the previous year. The deductible would rise to 10 percent in 2004 and 15 percent in 2005. The federal government would then step in and cover 90 percent of everything above the deductible with insurance companies paying the other 10 percent, according to the Associated Press.

President Bush pushed the bill as one of his top priorities since the Sept. 11, 2001, attacks.

"Terrorism insurance will help get America's hard hats back on the job, create new jobs for America's workers and spur billions in new investment in construction projects all across the country," Bush said in a statement. "This bill comes at a critical time, as commercial construction is at a six-year low."

One opponent of the bill, Sen. Phil Gramm, R-Texas, fought the bill fiercely, saying it overexposed taxpayers to losses, discouraged development of a private terrorism insurance market and did nothing about punitive damage awards against those hit by terrorism, which AP said he described as "piracy on a hospital ship." Federal payments would be capped at $90 billion the first year, $87.5 billion the second year and $85 billion in the final year of the program.

Sept. 11, 2001, attacks are not covered by the bill, which generated an estimated $40 billion in claims.

LOAD-DATE: November 28, 2002