Bush Pushes For Terrorism Re Backup

"We better find terrorism insurance because without it, it would be a catastrophic problem if there is another attack," the President said during a meeting late yesterday with insurance, business, and labor union representatives.

"It would make it really hard for our economy to recover a second time if there is an attack without adequate terrorism insurance," he added.

The President noted that the House has already passed terrorism reinsurance legislation–H.R. 3210. Now, he said, the Senate needs to act and respond.

"This is a bill that helps workers and helps strengthen the economy," President Bush said. "This is an important piece of legislation.

"I've heard some talk on Capitol Hill that the facts don't justify this type of legislation; that the facts don't justify the federal government stepping in as a stopgap," he said. "They're not looking at the right set of facts, as far as I'm concerned."

He acknowledged that the legislation pending in the Senate differs significantly from the House bill. The legislation passed by the House would provide loans to help insurers pay terrorism-related claims, while the Senate proposal would establish a more traditional quota-share reinsurance program to back up primary carriers writing terrorism risks when losses exceeded a predetermined retention.

Nonetheless, President Bush said, he believes there is bipartisan support for a federal stopgap. Once a bill passes the Senate, he said, it will be possible to work with the House to get a compromise bill passed quickly.

In his speech, the President cited numerous examples of business activities that are threatened by the lack of terrorism insurance. He said a $2 billion resort in Nevada, which could provide some 16,000 jobs, is on hold because of the lack of terrorism insurance. (He did not identify the resort.)

In Chicago, President Bush said, the Hyatt Corporation is planning to build a 1.5 million square foot office building downtown. However, he said, Hyatt has not been able to acquire financing for the project because of the lack of insurance.

Senate Democrats, meanwhile, are blaming Republicans for the standoff. During the President's speech, Assistant Democratic Leader Harry Reid, D-Nev., asked for unanimous consent to take up the terrorism insurance issue on the floor.

However, in a subsequent statement to the Washington Post, a representative of Senate Majority Leader Tom Daschle, D-S.D., said the Senate did not take up the issue because Republicans insisted on attaching tort reform language to the bill. The issue of tort reform has been the crux of the delay in the Senate since last year.

The President's initiative to jumpstart the terrorism reinsurance movement in Congress drew wide praise from insurance industry groups. However, some consumer groups, such as the Consumer Federation of America and Consumers Union, urged the president and Congress not to "give away' reinsurance to an industry which they said is flush with cash from recent capital infusions and extreme price increases.