Group life insurers would be covered under legislation that was scheduled to be introduced in the Senate last Thursday that allows for a two-year extension of current federal terrorism reinsurance coverage.
The bill is being drafted by staffers of Sens. Robert Bennett, R-Utah, and Chris Dodd, D-Conn. Dodd and his staff negotiated directly with the White House in November 2002, negotiations that led to enactment of the current bill, the Terrorism Risk Insurance Act. Also strongly supporting the bill are Sens. Charles Schumer, D-N.Y., Saxby Chambliss, R-Ga., and Jim Bunning, R-Ky.
According to officials at the Property Casualty Insurers Association of America, the bill contains several improvements over the original legislation, including the language specifying that group life insurers will be covered to the same extent as property/casualty insurance writers. The current legislation gave the authority to include group life insurers totally to the Treasury Department, which has refused to do so, citing reports that indicate this coverage is readily available.
Key improvements in the Bennett/Dodd bill are language calling for a so-called “soft landing,” which means that the federal reinsurance coverage extends until the specific contract runs out, and does not automatically expire on Dec. 31, 2007, when the program runs out, and extension of the current make/available provision. The current bill expires Dec. 31, 2005, and under the current language all federal support would cease.