Bush Must Keep Heat On Congress To Pass Terror Re Bill
It's about time that someone in Washington woke up and realized that we are even less prepared to withstand the economic impact of a terrorism attack now than we were on Sept. 11, primarily because terrorism insurance is hard or impossible to find or afford.
President George W. Bush should be applauded for yanking the heads of the ostriches in the Senate out of the sand, calling on them to put a terrorism reinsurance backstop in place before it is too late.
"We better find terrorism insurance, because without it, it would be a catastrophic problem if there is another attack," the President declared. "It would make it really hard for our economy to recover a second time if there is an attack without adequate terrorism insurance."
The President went on to say that he had "heard some talk on Capitol Hill that the facts dont justify this type of legislation; that the facts dont justify the federal government stepping in as a stopgap. Theyre not looking at the right set of facts, as far as Im concerned." He cited a number of major construction projects that have been delayed by the inability to secure terrorism coverage.
But before President Bush even had a chance to deliver his remarks, the Consumer Federation of America and Consumers Union called on him to drop his support for legislation that they claimed would "give away insurance in the event of future terrorism attacks."
However, the lack of terrorism coverage is not imaginary. A survey conducted by the Independent Insurance Agents of America and the Alliance of American Insurers confirmed that a problem does indeed exist. The survey found that:
A large percentage of insurers are excluding terrorism coverage.
Terrorism insurance is becoming increasingly unavailable, and if it can be found, the price is causing most clients to choose to go without coverage.
The limited amount of terrorism coverage that is available is largely being placed in non-standard markets.
Will President Bush's strong words be enough to prod a bickering Congress into action? How much longer can opponents ignore the growing body of statistical and anecdotal evidence that buyers are indeed going bare on terrorism, that the economic recovery could be at risk as a result, and that thousands of uninsured firms would be devastated by another attack?
Never underestimate the ability of Congress to procrastinate on any given issue, especially in an election year. Also keep in mind that even if Congress is roused from its slumber on this issue, the bill passed by the House offering loans to insurers to pay terrorism claims (a bad move that won't spur anyone to write more coverage) differs markedly from the one debated by the Senate (setting up a quota-share arrangement).
To translate his tough talk into action, President Bush must go beyond his photo op. He should keep the heat on Congress with repeated pronouncements, as well as by pushing some compromise measure–absent tort reforms that proved to be the poison pill in the Senate bill–that will actually allow primary carriers to start writing terrorism coverage again.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, April 15, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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