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House Approves Terrorism Insurance Bill

By Bill Swindell CongressDaily

WASHINGTON --    The U.S. House of Representatives cleared legislation yesterday that would renew the federal government's terrorism risk insurance program for seven years, providing a lengthy extension for a program designed to bring stability for the commercial real estate sector in the aftermath of the Sept. 11, 2001, terrorist attacks (see GSN, Dec. 13).

By a 360-53 vote, the chamber passed the bill and sent it to the White House, where President George W. Bush is expected to sign it into law before the program expires Dec. 31.

Passage ends a one-year lobbying battle that pitted sectors of the insurance industry against each other.

Commercial real-estate interests were successful in pushing for inclusion in a House bill a provision that required carriers to make available coverage for a nuclear, biological, chemical or radiological attack.

Shopping-center and hotel operators who wanted such coverage scored a victory when the American Insurance Association, the umbrella group representing all carriers, endorsed the provision this year.

Small carriers bitterly opposed the language, arguing such a mandate would put them at risk because they would not be able to shoulder such a burden in the event of an attack.

Under such pressure, the Senate scrapped the provision in its bill, along with numerous other House items.  The lone exception was to expand coverage for terrorist acts committed by Americans.

House Financial Services Committee Chairman Barney Frank (D-Mass.) became frustrated with the Senate's take-it-or-leave-it stance during negotiations and had threatened to pass a short-term extension to provide more time to work out differences between the versions.

Last week, the House passed a revised bill, stripping most of its provisions except three notable sections, including one that would allow the program to decrease deductibles for areas that have already suffered a terrorist attack.

The New York delegation pushed for such language, arguing it is needed to aid in rebuilding the former World Trade Center site.

"Under the reset, if, heaven forbid, our country does suffer another catastrophic attack, the nationwide trigger would be reset and the nationwide deductible for any insurer that pays out losses related to that attack would be reset at lower levels," said Representative Gary Ackerman (D-N.Y.).  "God willing, New York will never be hit a second time, and, God willing, your state will never suffer a catastrophic attack like 9/11."

But the Senate did not budge and Frank was forced to bring up the Senate bill Tuesday.

Frank said he would likely revisit some of the House provisions next year, by moving them as standalone pieces.

He also took aim at Senate Banking ranking member Richard Shelby (R-Ala.), blaming him for a "one-person veto" that did not allow the Senate to vote on floor amendments to the bill.

"I disagree with his obstruction," Frank said.

A Shelby spokesman defended the Senate bill, noting that it stood the best chance of passing with unified support from industry and White House backing.

"Senator Shelby believes it fairly accommodates those who rely on the program," the aide said.

Note to our Readers

GSN ceased publication on July 31, 2014. Its articles and daily issues will remain archived and available on NTI’s website.

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