Compromise On Group Life In Terrorism Bill Is Welcome

The effort to include group life directly in the legislation really gained steam only after both bills were passed and House and Senate conferees began wrangling over how to reconcile them.

It is always difficult to get conferees to include a significant provision in the compromise bill that was not contained in either the House or Senate versions.

Moreover, the life insurance industry was significantly divided on this issue. While some group life companies saw their reinsurance programs dry up, and believed a federal backstop was vital to maintain the viability of the business, others werent so sure.

These companies managed to put together reinsurance programs and saw a federal program as unnecessary. Indeed, some of these companies felt that a federal program would deprive them of a competitive advantage.

Congress is always reluctant to put itself in the middle of an intra-industry battle. The inability of the group life industry to speak with one voice undermined the prospects for inclusion as much as anything did.

Finally, there were growing concerns on Capitol Hill that the legislation was getting out of hand. Many powerful members of Congress believed that the insurance industry wanted the federal government to step into market at a very low level of losses and across too broad a spectrum of coverages.

They wanted the scope of federal involvement to be as narrow as possible. Indeed, it should be noted that in addition to group life, personal lines property-casualty insurance was left out of the package–a decision that has rankled the p-c industry.

Considering the circumstances, the advocates of including group life in the package did well. They deserve congratulations.

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 4, 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.