Terror Insurance Bill On Track

The Democratic members of the committee are Sens. Paul Sarbanes, D-Md., Chris Dodd, D-Conn., Jack Reed, D-R.I., and Charles Schumer, D-N.Y.

Republican members are Sens. Phil Gramm, R-Texas, Dick Shelby, R-Alabama, and Mike Enzi, R-Wyo.

Prior to the agreement, Sen. Reid spoke out on the floor of the Senate about his frustrations in getting the conferees named after efforts to move a unanimous consent requestthe parliamentary device used for the appointmentfailed.

Sen. Reid blasted both the Republican Party and the insurance industry for the inability to reach an agreement on the conferees.

He said that, initially, Senate Majority Leader Tom Daschle decided that there would be three Democrats and two Republicans from the Senate on the Conference Committee. However, Sen. Reid said, Republicans objected, asking for a four-to-three ratio. Sen. Daschle agreed to that, but still the Republicans could not work out which of their members would be on the Conference Committee, Sen. Reid said.

Moreover, he charged, the insurance industry apparently does not care enough to put pressure on the Republicans to go to conference.

"If the role were reversed, and we, the Democrats, were holding up the appointing of conferees on a terrorism insurance bill, our phones would be ringing," Sen. Reid said. "We would have petitions, we would have demonstrations," he said. "But because it is the insurance industry, which is a little closer to the minority than we are, nothing happens."

"So as far as I am concerned, this bill is dead," he said. "Im not putting the unanimous consent request in my desk anymore. I am putting it in the garbage can. And we will wait and see what happens."

Despite Sen. Reids frustration, industry representatives kept expressing optimism that an agreement would be reached and the long-sought legislation would get back on track.

At press time, the House still had not appointed its conferees, but that is not seen as a major issue since the House operates under different parliamentary rules than the Senate.

Industry representatives expect the conferees and their staffs to work through the different House and Senate versions of terrorism insurance during the August recess. The conferees will have to iron out differences between two very different approaches to creating a federal role in the terror insurance market.

The House approach is a federal loan program under which the Treasury would provide loans to insurance companies that suffer terrorism-related losses above a retention level. The loans would have to be repaid over a 20-year period.

The Senate approach is a quota-share program under which the Treasury would pay up to 90 percent of terrorism-related losses above a retention level, which would not have to be repaid.

The bills also differ markedly on the controversial issue of tort reform, with the House bill containing much stronger tort reform provisions than the Senate bill.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 29, 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.