Magazine article American Banker

Partisan Debate on Terror Bill

Magazine article American Banker

Partisan Debate on Terror Bill

Article excerpt

The Senate began debating legislation to establish a temporary government terrorism insurance program Thursday but was immediately mired in political differences that have dogged the bill since last year.

Senate Majority Leader Tom Daschle told reporters that he hopes the disputes can be resolved in time for a vote next week.

The outlook for quick agreement looked cloudy Thursday afternoon, as Democrats rejected a key Republican amendment that would have prohibited victims of terrorism from suing private-sector interests such as insurance companies or building owners for punitive damages unless they were found criminally negligent.

The Bush administration reiterated Thursday that it would oppose any terrorism insurance bill that does not prohibit victims from collecting punitive damages from private entities. The Democratic bill would bar government funds from being used to pay punitive damage awards but does not address suits against the private sector.

Republicans have also raised other concerns, including one over how much individual insurance companies should pay in claims resulting from future acts of terrorism before getting federal aid.

The Democratic bill, introduced by Sen. Christopher Dodd of Connecticut, would create a one-year program -- which could be extended to two years -- under which the federal government would pay for 90% of losses between $10 billion and $100 billion. The insurance industry would cover the first $10 billion of property/casualty losses, and an individual insurer's share of that would be capped based on its market share.

Republicans, led by Sen. …

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