Terrorism Bill Faces Roadblock
Washington
Legislation creating a federal backstop in 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 bill, is suggesting that the industrys retention level of $10 billion is too low, and should be $10 billion only in the first year, then increased to $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 percent 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 Alliance of American Insurers in Downers Grove, Ill., 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 a House-Senate conference committee.
Ms. Berthoud noted that the issue of tort reform 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 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.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, May 6, 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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