Another Backstop Bill Roadblock ?
By Steven Brostoff, Washington Editor
NU Online News Service, May 2, 11:14 a.m. EST?Legislation creating a federal backstop for the terrorism insurance market remains bottled up in the Senate amid concerns that it could face yet another roadblock.
Sources told National Underwriter that Sen. Phil Gramm, R-Texas, one of the original sponsors of the Senate's bill, is suggesting that the industry's retention level of $10 billion is too low, and should be increased to $10 billion in the first year, and $20 billion in the second.
Above the retention level, the legislation would establish a quota-share program with the federal government paying up to 90% of insured losses arising from a terrorist attack.
Maria Berthoud, senior vice president of government affairs for the Alexandria, Va.-based Independent Insurance Agents and Brokers of America, said she remains optimistic that the issues can be resolved as a matter of necessity.
However, she said, recent developments add to the legislative challenge.
Deborah Sherno, a representative of the Downers Grove, Ill.-based Alliance of American Insurers, said the Alliance has strong opinions about how a bill should be structured, but at this point the priority is to get a bill moving through the Senate so that a compromise can be worked out in conference.
Ms. Berthoud noted that the issue of tort reform to set individual recovery limits also continues to plague the legislative effort. One problem, she said, is the fact that the House passed a bill last year that contained strong tort reform measures.
She said she has been told that some leaders in the Senate who oppose tort reform are concerned that even if the Senate passes legislation with no tort reforms, the opponents of reform will lose out in conference.
A conference is a committee composed of members of both the House and the Senate who work out differences between bills passed by each chamber that address a particular issue.
Once the committee agrees on a compromise bill, it cannot be amended. It is subject to a straight up-or-down vote on the floor of each chamber.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.