06-22-2002

TERRORISM: Senate Passes Terrorism Insurance Bill

The Senate on June 18 voted 84-14 to approve legislation that would make
the federal government a short-term insurance backstop for commercial
losses incurred in future terrorist attacks. The House approved its own
terrorism insurance legislation last November, and a conference committee
is expected to reconcile the two chambers' bills. "This isn't about
helping insurance companies," said Sen. Christopher J. Dodd, D-Conn.,
the sponsor of the Senate bill. "It's about helping our economy. And
it isn't about an imaginary threat, it's about a serious drag on our
economic health and well-being." All of the opposing Senate votes
came from Republicans, led by Sen. Phil Gramm, R-Texas, the ranking member
on the Banking, Housing, and Urban Affairs Committee. He argued that the
bill was a "gross overreach" that puts taxpayers at risk and
discourages the private reinsurance market from flourishing. Under the
Senate bill, the insurance industry would have to pay $10 billion of
insurance costs for terror attacks for two years. Beyond that, the
government would cover 90 percent, with the insurance industry paying the
remaining 10 percent. Under the House bill, the government would agree to
pick up, for at least one year, 90 percent of the losses from any major
attack.


Pamela Barnett/CongressDaily

National Journal