Committee draft of terrorism coverage bill divides industry

The House Financial Services Committee is poised to unveil legislation that would reauthorize the federal government's terrorism risk insurance program with a provision that would require carriers to make available coverage of a nuclear, biological, chemical or radiological attack.

The draft bill, according to sources, would pit different segments of the insurance industry against each other over the provision to include coverage of a nuclear, biological, chemical or radiological attack with a 7.5 percent insurer deductible. "The jury is still out on this [provision]," said one lobbyist.

The American Insurance Association and large policyholders with hotel and retail properties back the inclusion for such coverage, but it is opposed by the Property Casualty Insurers Association of America and the National Association of Mutual Insurance Companies, which argue that it would result in massive risk exposures for smaller companies.

"Getting some availability of [nuclear, biological, chemical or radiological] coverage, we're fine with that. We just think that the government should give incentives to the private sector to do it rather than mandating it in a way that is market inefficient, and creates dislocations and potentially bankruptcies," said Ben McKay, senior vice president for federal government relations at the Property Casualty Insurers Association of America.

Financial Services Capital Markets Subcommittee Chairman Paul Kanjorski, D-Pa., has scheduled a Thursday hearing for witnesses to offer opinions on the measure to reauthorize the program that expires at year's end. A markup is expected before the August recess.

The draft bill also would lower the program's trigger from the current $100 million to $50 million, which was a provision that NAMIC lobbied for because it would allow smaller carriers to participate. The draft would reauthorize the program for 10 years.

Senate Banking Chairman Christopher Dodd, D-Conn., has called for a permanent reauthorization of the program. The draft also would maintain the $100 billion program cap and contains additional language to further provide "finite liability limits" for insurers and the federal government.

Another provision would clarify that a carrier's exposure is limited to its deducible and co-payments, and claims concerning these limits would be consolidated in federal court. The draft would add group life insurance coverage to the program, which will please the American Council of Life Insurers. It would include coverage for acts of domestic terrorism; current law applies only to acts of foreign terrorism as certified by the Treasury and State departments as well as the attorney general.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.