NU Online News Service, Nov. 15, 10:06 a.m. — Washington
By a voice vote, the U.S. House of Representatives last night approved an industry-backed terrorism insurance bill that could provide federal assistance for group life.
The Senate is widely expected to follow suit, with a vote possible as early as today, sending the bill to President Bush’s desk. Senate Majority Leader Tom Daschle, D-S.D., said he will bring the bill up for a vote, according to published reports.
Final approval of the oft-delayed legislation would be the culmination of a year-long effort by the Bush administration, the insurance industry and the construction industry to shore up a market, particularly for high-profile properties, which they say was shattered by the Sept. 11, 2001, terrorist attacks.
Consumer groups, such as the Consumer Federation of America, Washington, continue to blast the legislation, calling it a taxpayer-financed giveaway to the insurance industry.
Sources told National Underwriter that the breakthrough came following a “full-court press” by President Bush, who personally lobbied some Republican leaders who remain unhappy with the liability provisions of the bill.
Indeed, House Majority Whip Tom DeLay, R-Stafford, Texas, who will be majority leader in the next Congress, promised to seek far tougher liability standards next year.
The primary concern is that American businesses that are hit by a terrorist attack could be held liable for punitive damages for negligence that caused death or injuries.
Despite the controversy over punitive damages, most Republicans hailed passage of the legislation.
The legislation will provide for 300,000 jobs, boost construction and stimulate the economy while ensuring the availability and affordability of terrorism insurance, said House Financial Services Committee Chairman Mike Oxley, R-Findlay, Ohio.
“It increases national preparedness against terrorism and puts Americans back to work on vital construction and development projects,” he said in a statement.
All the insurance trade groups, representing both agents and companies, support the legislation.
Under the legislation, the federal backstop would come into effect when the Treasury secretary, in consultation with the secretary of state and the attorney general, certifies that a terrorist attack has occurred causing at least $5 million of insured losses.
The program would cover all commercial property-casualty lines, including workers’ compensation and business interruption. For workers’ compensation only, the program would cover both terrorism and war.
The program excludes life and health insurance, but the Treasury secretary is empowered to extend the program to group life without the need for additional legislation, if a mandated study identifies a need.