House, Senate Reach Deal on Terror Insurance; Bill Leaves Decision on Punitive Damages to states.(BUSINESS)
Byline: Tom Ramstack, THE WASHINGTON TIMES
The House and Senate agreed on compromise legislation yesterday that would make the federal government pay most of the damages for major acts of terrorism, but the amount would be decided under state laws.
State laws also would be used to decide whether to impose punitive damages in lawsuits resulting from terrorism.
The compromise does not include the ban on punitive damages sought by the Bush administration, which was the main issue holding up an agreement.
White House spokeswoman Claire Buchan said that the compromise overcomes President Bush's objections to previous terrorism insurance proposals and that he would sign the bill.
"We're very pleased that the elements of a deal appear to be falling together," Miss Buchan said. "The president believes it's very important for creating new jobs, for getting construction workers back to work and for encouraging investment for construction projects."
Insurance companies would be required to pay the first $10 billion in damages in the first year of the three-year bill, $12.5 billion the second year and $15 billion the last year. The federal government would pay the rest.
The legislation would appoint one federal court to rule on all lawsuits involving terrorism. However, the court would be required to decide the cases based on the laws of the states where the terrorist acts occurred.
Mr. Bush has made terrorism insurance a priority this year. He said that about 300,000 construction jobs have been lost because projects cannot get the insurance required by banks before they make the loans. …