NU Online News Service, June 18, 7:22 p.m. – The U.S. Senate voted 84-14 today to pass S. 2600, the Terrorism Risk Insurance Act of 2002.
If enacted, the bill would give the federal government the authority to protect property-casualty insurers, but not life or health insurers, against catastrophic losses resulting from acts of terrorism.
Insurers would have to cover $10 billion in terrorism-related losses over the next two years. The federal government would cover 90% of the losses between $10 billion and $100 billion. Congress would have to decide what to do if losses exceeded $100 billion.
The secretary of the Treasury could extend the protection for a third year, but in that case the insurers’ deductible would increase to $20 billion.