Insurance industry trade groups are urging Congress to movequickly for a compromise that reconciles rival measures to extendthe federal terrorism insurance backstop that were approved inHouse and Senate committees yesterday.

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Meanwhile, the Consumer Federation of America voiced moderatesupport of the Senate bill, but harshly criticized the Housemeasure as one that would put an additional burden on taxpayers andconsumers.

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J. Robert Hunter, director of insurance for the CFA, wasparticularly critical of language in the House legislation thatpre-empted the current ability of states to regulate terrorisminsurance rates and forms.

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His criticism was voiced even before insurance industrylobbyists were able to persuade the House Financial ServicesCommittee to insert language during the markup of the bill that ifenacted by Congress would significantly streamline surplus lineslaws.

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Leigh Ann Pusey, senior vice president for government affairs ofthe American Insurance Association, said the trade group and itsmembers "will continue working with members of Congress and theadministration in that same spirit of cooperation to get workablelegislation to the president's desk in the next few weeks."

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William Stiglitz, president of the Independent Insurance Agentsand Brokers of America, "applauded" the committees "for producingthoughtful and needed legislation."

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National Association of Professional Insurance Agents executivevice president & CEO Len Brevik said that PIA's message toCongress is, "Just renew it."

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Ernie Csiszar, Property Casualty Insurers Association of America(PCI) president and chief executive officer, said he applauded thework of the committee chairmen in the House and Senate for theirwork on the bill and said PCI "looks forward to working with aconference committee to ensure that President Bush has theopportunity to sign workable legislation into law by December31."

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Ken Crerar, president of the Council of Insurance Agents andBrokers, said he was pleased that "very significant action occurredtoday in both the House and Senate, which we hope will result inthe extension of the federal backstop for terrorism insurance."

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"We are especially pleased," he added, "with the action taken bythe House Financial Services Committee. In addition to passing abill that we believe provides a good extension of the program witha pathway for a "permanent" pooling fix, the House committeeincluded market reforms advocated by The Council that wouldsignificantly streamline surplus lines laws–a high CIAB priorityfor many years."

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The provisions added during the markup referred to by Mr. Crerarwould allow sophisticated commercial purchasers of commercialcoverage, including terrorism, to bypass state declinationrules.

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Additionally, all other surplus lines policyholders (who buyinsurance with terror cover on a multistate basis) would only haveto abide by the declination rules in the state in which theinsurance was placed.

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David Winston, National Association of Mutual InsuranceCompanies senior vice president for federal affairs, said, "NAMICsupports S. 467, the Terrorism Risk Insurance Extension Act of2005, as reported by the Senate Banking Committee and urges itsswift passage on the Senate floor."

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He thanked senators supporting extension "for their considerableefforts to move this critically important legislation in ameaningful way prior to the expiration of the act at the end ofthis year."

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Mr. Winston also applauded the efforts of the House FinancialServices Committee in reporting its bill out."

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Eric J. Oxfeld, president of UWC–Strategic Services onUnemployment and Workers' Compensation and the National Foundationfor Unemployment Compensation and Workers' Compensation–added, "Forthe sake of America's workers and employers, UWC urges the fullHouse and Senate to act quickly to assure that a workable terrorismrisk insurance backstop remains in place after the end of2005."

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Mr. Hunter called the differences between the House and Senatebills "profound." He said that "we applaud Sen. Richard Shelby,R-Ala., chairman of the Senate Banking Committee, for his effortsto sharply increase insurer cost sharing under the currentprogram.

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"The Senate bill would immediately increase the share of lossesinsurers must pay, regardless of the size of the terrorist attack.It would also reduce the lines of insurance that will be coveredunder TRIA and move toward a definite end of this temporary programafter 2007."

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But the House bill, Mr. Hunter said, "would harm both taxpayersand consumers. It does not reduce taxpayer exposure to terrorismlosses as much as the Senate bill and appears to actually increasetaxpayer payments for larger terrorist attacks."

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