Oxley: No Free Money For Insurers

By Steven Brostoff

NU Online News Service, July 30, 3:10 p.m. EST, Washington?Terrorism insurance legislation must contain a provision requiring insurance companies to repay federal assistance, the chairman of the House Financial Services Committee said yesterday.

"There are several essential consumer protections in the House bill that must be a part of the final legislation if we hope to get a law enacted this year," Rep. Mike Oxley, R-Ohio, said in a statement.

"We are not going to give free money to insurers, trial lawyers or large commercial policyholders without an industry payback provision and sufficient legal protections to safeguard the U.S. Treasury and consumers' wallets," he said.

Rep. Oxley issued the statement following the House leadership's naming of its members of the House-Senate Conference Committee that will develop a consensus bill.

Rep. Oxley said he has talked to his counterparts in the Senate numerous times and is confident that a consensus plan can be developed.

The House bill, H.R. 3210, is a government loan program under which insurance companies that experience terrorism-related losses could receive a loan from the Treasury that would be repaid largely through assessments on commercial policyholders.

The Senate bill, S. 2600, is essentially a quota-share program under which the federal government would pay up to 90 percent of terrorism-related losses, with no requirement that insurance companies repay the Treasury.

In addition, H.R. 3210 contains strict tort reform provisions, including a ban on punitive damages and caps on attorney's fees, while S. 2600 contains only procedural reforms.

The House conferees are: Reps. Oxley, Richard H. Baker, R-La., Robert W. Ney, R-Ohio, Sue Kelly, R-N.Y., Christopher Shays, R-Conn., Vito Fossella, R-N.Y., Mike Ferguson, R-N.J., John J. Lafalce, D-N.Y., Paul Kanjorski, D-Pa., Ken Bentsen, D-Texas, James Maloney, D-Conn., and Darlene Hooley, D-Ore.

In addition, Reps. James Sensenbrenner, R-Wis., Bob Goodlatte, R-Va., and John Conyers, D-Mich., will participate only on the tort reform language.

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Oxley: No Free Money For Insurers

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