Tags: Bush | Signs | Terrorism | Insurance | Bill

Bush Signs Terrorism Insurance Bill

Tuesday, 26 November 2002 12:00 AM

The Terrorism Risk Insurance Act, or H.R. 3210, would also kick-start $15 billion in commercial construction projects stalled since last year's attacks on the World Trade Center and the Pentagon and create 300,000 hardhat jobs, the White House said.

"The Terrorism Risk Insurance Act will provide coverage for catastrophic losses from potential terrorist attacks," Bush said Tuesday before signing the measure into law.

"Should terrorists strike America again, we have a system in place to address financial losses and get our economy back on its feet as quickly as possible.

"With this new law, builders and investors can begin construction and real estate projects that have been stalled for too long and get our hard hats back to work."

Provisions of the law stipulate the government would pay 90 percent of losses above the insurance company's deductible. Insurance companies would be responsible for the remaining 10 percent above the deductible. These would be figured at 7 percent of premiums received in the previous year in 2003, going up to 15 percent in 2005.

The federal liability would be capped at $90 billion in the first year, $87.5 billion in the second year and $85 billion in the third and final year after a threshold of $10 billion in claims.

The bill, tied up on Capitol Hill over the question of liability in civil suits, was passed overwhelmingly last week in a lame-duck session of Congress after repeated appeals by Bush, who repeatedly spotlighted the measure and its necessity in midterm campaign appearances around the nation.

Republican efforts in Congress to severely limit lawsuit liability were stopped to ensure its passage but will be brought up again next year.

Civil liability suits resulting from a terrorist attack would be combined in a single federal court to prevent lawyers "from shopping for courts with a reputation for outrageous awards," Bush said.

"It's important for our taxpayers to understand taxpayer dollars will not be used to pay punitive damages," he said.

He thanked Congress for putting the "interests of the workers and taxpayers ahead of lawyers."

"I look forward to working with the new Congress on stronger measures to prevent abusive lawsuits," Bush said.

The attacks of Sept. 11, 2001, by suspected al-Qaeda terrorists resulted in $40 billion in damages.

Insurance companies, reeling from claims, either curtailed their coverage of loss from terrorist acts, or raised premiums to a prohibitive level, or both.

The administration said the result was that projects, from hospital wings to office buildings, were canceled or suspended.

"Across America, hospitals and office buildings and malls and museums and construction jobs and many transportation companies have had difficulty finding terrorism insurance. More than $15 billion in real estate transactions have been canceled or put on hold because owners and investors could not obtain the insurance protection they need. Commercial construction is at a six-year low and thousands of hardhat workers have been kept off the job," Bush said.

"By helping to insure that terrorism insurance is affordable and available, the Terrorism Risk Insurance Act will permit many construction projects to move forward and to help this economy grow."

Travis Plunkett, legislative director of Consumer Federation of America, had said, "Instead of helping the relatively few businesses that can't get terror coverage, Congress is poised to give away reinsurance to a rich and politically powerful insurance industry."

"The good news is that it was passed. Like all legislation, it could have been better but at least it is moving in the right direction," said Thomas A. Schatz, president of Citizens Against Government Waste.

Copyright 2002 by United Press International.

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The Terrorism Risk Insurance Act, or H.R. 3210, would also kick-start $15 billion in commercial construction projects stalled since last year's attacks on the World Trade Center and the Pentagon and create 300,000 hardhat jobs, the White House said. "The Terrorism Risk...
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2002-00-26
Tuesday, 26 November 2002 12:00 AM
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