SECTION: BUSINESS; Pg. E3

LENGTH: 513 words

HEADLINE: GROUP DENIES TERRORISM INSURANCE CRISIS EXISTS

BYLINE: MICHAEL REMEZ; Courant Staff Writer

DATELINE: WASHINGTON --

BODY:
A national consumer group Thursday criticized the push for a sweeping federal terrorism insurance backstop, arguing that the trouble spots are limited and the market is adjusting to changes that followed the horrific terror attacks of Sept. 11.

"There is no broad-based terrorism insurance crisis," said J. Robert Hunter, an insurance expert with the Consumer Federation of America. Hunter said circumstances have changed greatly since Congress started consideration of a federal backstop last fall. And he said the economic crunch some had anticipated has not come to pass.

Stand-alone terrorism insurance is available for most risks at an increased price, he said at a press conference, though he acknowledged that terror coverage is less available in densely developed cities -- such as New York and Chicago -- and for what are known as "trophy" or prestige buildings.

Hunter called on Congress to rethink the legislation passed by both chambers and awaiting a conference committee in September. President Bush has repeatedly called on Congress to finish the job, saying the lack of terror coverage is slowing construction and killing large real estate deals.

Insurance and business groups repeated Thursday their arguments that the lack of adequate terrorism coverage is real and that the problems are worsening.

"I think the critics would like to stick their heads in the sand and pretend the problem is going away. It is not," said Martin L. DePoy, a spokesman for the Coalition to Insure Against Terrorism, a group of business interests.

DePoy said the problems are not limited to major cities, and that businesses and local governments are being forced to go without terror coverage.

Sen. Christopher J. Dodd, D-Conn., will take part in negotiations on the final measure. In a prepared statement, he said a backstop is still needed in case of another major terror attack.

"I'm optimistic that common ground can be found, and that we can enact into law a measure that protects our nation in a thoughtful and cost-effective manner," Dodd said.

Hunter's group said lawmakers must consider how insurance markets have changed and developed since last September when considering the final bill. The relative financial health of the industry also demands a high trigger for government aid, Hunter said.

He said any measure should be targeted to problem areas and structures, such as those trophy buildings, and that any money given to insurers should be paid back.

The Senate bill requires insurers to pay a total of $10 billion in claims after a terrorist attack before the federal program kicks in. Beyond that amount and up to $100 billion, the government would pay 90 percent of claims and insurers 10 percent. Smaller insurers could become eligible for government money if particularly hard hit by a single terrorist act.

The House bill requires insurers to pay claims of greater than $1 billion before the industry would be eligible for federal loans for 90 percent of claims beyond that amount. It also includes controversial liability limits.



LOAD-DATE: August 23, 2002