House Democrats have scheduled a vote this week on legislation designed to signal the Senate that some of the provisions in its version of the bill extending the federal backstop for terrorism risk insurance must be included in a final bill.
The new bill would add coverage for group life to the Senate bill as well as include a provision limiting the cases where a life insurer can deny coverage to an applicant based on the applicant’s travel plans.
The bill was cleared for House floor action on Dec. 6.
Representing the industry, a spokesman for the American Council of Life Insurers said, “The process still isn’t over, but we are pleased that group life is still on the table.”
The language in the revised bill says “group life insurance companies are important financial institutions whose products make life insurance coverage affordable for millions of Americans and often serve as their only life insurance benefit.”
It further justifies including group life by saying the “industry, in the event of a severe act of terrorism, is vulnerable to insolvency because high concentrations of covered employees work in the same locations, because primary group life insurers do not exclude terrorism risks while most catastrophic reinsurance does exclude such risks, and because a large-scale loss of life would fall outside of actuarial expectations of death …”
A spokesman for Rep. Gary Ackerman, D-N.Y., quoted the congressman as saying the goal of the new bill is to put pressure on Senate lawmakers to negotiate with the House, especially since the current legislation, the Terrorism Risk Insurance Extension Act, expires Dec. 31, 2007.
“The indication we have from them is ‘take or leave it’ but that’s not going to happen,” Ackerman’s spokesman quoted him as saying. “We hope that this is sufficient and they accept it, but realistically the clock is running.”
Specifically, the compromise that will be proposed will accept the Senate’s 7-year time limit to the bill and drop language in the current House bill adding coverage for nuclear, biological, chemical and radiation events.
But it will demand that the Senate accept the House “reset” provision, which benefits areas which have suffered prior terrorist attacks and reduce the “trigger” for federal involvement from the Senate $100 million to the House’s $50 million.
It will also accept the accelerated “pay-back” provisions included in the Senate bill.