Senate Votes Yes On Terrorism Insurance
June 19, 2002
Legislation To Create Federal Reinsurance Program Goes To Conference Committee
Inman News Features
The U.S. Senate today passed a terrorism insurance bill, S. 2600, the Terrorism Risk Insurance Act of 2002, that real estate industry groups are applauding as a step toward U.S. economic stability in the event of future terrorist attacks on the nation.
James M. Murphy, chairman of the Mortgage Bankers Association of America, said that group is "enormously pleased" that the Senate passed the bill, which would create a Federal terrorism reinsurance backstop for private-sector insurers.
"This vote indicates that the majority of the Senate now agrees that the availability and affordability of terrorism insurance can have serious economic consequences," Murphy said in a statement.
The bill passed on a vote of 84-14.
The National Association of Real Estate Investment Trusts, known as NAREIT, also applauded the Senate?s passage of S. 2600. The group was a founding member of the Coalition to Insure Against Terrorism and has supported the effort to coordinate the strategic legislative and communications initiative involving 60 trade associations and companies.
NAREIT CEO Steven A. Wechsler said the group has been working on the terrorism reinsurance issue since Sept. 11.
"A short-term Federal backstop is necessary to provide the nation's insurers with a mechanism to make affordable terrorism coverage widely available," he said. "Senators came to recognize that as policies came up for renewal, a growing number of businesses were left unprotected or not fully protected against acts of terrorism."
The U.S. House of Representatives last year passed legislation that would create a short-term program to cover losses caused by terrorism. The Senate's approval of S. 2600 paves the way for a conference consideration of the two measures, according to NAREIT?s statement.
Martin DePoy, NAREIT VP of government relations and a spokesperson for the coalition, said the group "strongly encourages conferees to work out their differences in a timely manner for the sake of our economic security."
One difference between the House and Senate bills is that the House version contains restrictions against lawsuits that would limit victims? claims for punitive damages, curtail nonmonetary damage awards and cap attorney?s fees. Those provisions aren?t included in the Senate version of the bill. Bush administration officials reportedly have said the President would veto legislation that doesn?t include restrictions on lawsuits.
Copyright: Inman News Service