Terrorism Bill Goes to Senate Floor; AAI Calls for Rapid Passage

The Alliance of American Insurers (AAI) called June 13 for passage of the terrorism insurance bill (S 2600) now under debate on the Senate floor.

“Senate Democratic leaders obtained unanimous consent yesterday to begin debate on the terrorism insurance bill with no agreement on the number of amendments to be considered,” David Farmer, Alliance senior vice president of federal affairs, remarked.

“We expect a number of amendments to be raised. Our understanding is that the Majority Leader intends to allow extended discussion and amendments before moving to end debate, since the legislation has not been considered in committee.

“The Alliance member companies are calling for the bill to be swiftly agreed upon and moved to conference. This bill contains many features that we find attractive and is probably superior in some ways to the House-passed legislation, particularly its structure as a reinsurance backstop.”

As currently written, S 2600 contains an individual company deductible and provides in 2002 for an 80/20 reinsurance arrangement after a deductible of $10 billion has been met. The Treasury secretary could extend the program until the end of 2003. In that year, the initial threshold for government assistance would increase to $15 billion. The bill also would require civil lawsuits be brought in federal court, with existing state law to apply.