Terror Bill Still Faces Long Road
By Steven Brostoff, Washington Editor
NU Online News Service, June 19, 9:50 a.m. EST, Washington?The 84-14 Senate vote in favor of creating a federal backstop in the terrorism insurance market represents a major step down the road towards enactment, but there is still a long way to go.
The Senate bill, which calls for a quota share program in which the federal government will pay up to 90 percent of losses arising from a terrorist event, must now be reconciled with the House bill, which calls for federal government loans to insurers which must be repaid.
In addition, while the House bill, H.R. 3210, contains strict tort reform measures?including a prohibition against punitive damages for lawsuits filed against U.S. businesses that are targets of terrorist attacks?the Senate bill, S. 2600, contains far less extensive tort reform measures.
A House-Senate Conference Committee, which is expected to convene shortly, will have to work out the fundamental differences between the two bills and develop a consensus package that can be approved by the Republican controlled House, the Democratic controlled Senate and President Bush.
The tort reform issue could continue to prove troublesome. Bush administration officials are on record in a letter to Senate Minority Leader Trent Lott, R-Miss., as saying they will urge President Bush to veto any terrorism insurance bill that allows punitive damages to be assessed against U.S. businesses.
Moreover, while consumer organizations, such as the Washington-based Consumer Federation of America, say that any terrorism bill must require insurers to repay any government assistance, insurers say that a loan program is insufficient to encourage reinsurers to write terrorism risks.
© 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.