U.S. terrorism insurance bill progresses

Despite speculation that legislation to create a U.S. government backstop for terrorism reinsurance was recently stalled, progress seems to be in the offing with the formation of a Congressional committee to write a consensus bill. Seven Senators have been appointed to find middle ground between a House of Repre- sentatives bill created late last year and the more recent Senate solution, Bill S. 2006.

Three Republican and four Democratic senators make up the committee that is expected to hammer out a compromise bill. The Senate plan calls for the government to act as an excess reinsurer, while the House proposal includes loans to be paid back by insurers in the event of a terrorist attack. The plans also differ in terms of tort access, a stumbling block throughout the process.

The Risk and Insurance Management Society (RIMS) praised the committee’s formation, with society president Chris Mandel noting, “Appointing the conference committee on the terrorism insurance bill is a critical step in getting the government backstop that commercial policyholders need.” At the time the appointments were made, RIMS delegates were meeting with legislative staff on Capitol Hill to advance the society’s hopes for a compromise bill. Among the provisions RIMS is calling for is “risk sharing” between insurers and government, with retention levels set at individual company levels, and overall a broad definition of “terrorism”.