This bill passed in the Senate 86-11. The Dems all waved it through. The 11 Republican dissenters included Phil Gramm who said the bill "discouraged development of a private terrorism insurance market" (something no economy should be without).
It's win-win for insurance companies -- they can charge higher premiums to cover the cost of their own deductibles plus the risk that payouts might exceed the $90 billion the government is footing -- that's if nothing happens. They're fully covered up to $90 billion (more than double the cost of 9/11) by the taxpaying public if something does.
Nomi
Bush signs bill to protect insurance industry in future terror attacks
By Scott Lindlaw
ASSOCIATED PRESS November 26, 2002
WASHINGTON – President Bush said legislation he signed Tuesday to shield the insurance industry from catastrophic costs of future terror attacks is vital to the war on terror and to the nation's economic security.
"Builders and investors can begin construction on real estate projects that have been stalled too long and we can get our hard hats back to work," Bush said in an East Room ceremony, his second in two days.
The president created the Homeland Security Department on Monday.
The terrorism insurance bill had been a top priority for the president since shortly after the Sept. 11 attacks. From the White House and from the campaign trail, Bush argued that the inability of companies to get affordable insurance for large construction projects was costing the economy thousands of jobs.
The GOP's success in this month's midterm elections gave Bush leverage to insist that Congress complete the bill in the lame-duck session before adjourning for the year. The bill passed by a wide margin, with the main opposition coming from Republicans.
Under the bill, the government wouldn't step in on any claims less than $5 million. Insurance companies would pay a deductible in 2003 equal to 7 percent of the premiums they received the previous year. The deductible would rise to 10 percent in 2004 and 15 percent in 2005. The federal government would then cover 90 percent of everything above the deductible with insurance companies paying the other 10 percent.
Federal payments would be capped at $90 billion the first year, $87.5 billion the second year and $85 billion in the final year of the program.
The law does not cover the Sept. 11 attacks, which generated an estimated $40 billion in claims.
The president bowed to Democratic demands for unlimited punitive damages in civil lawsuits related to terror attacks, which many Republicans consider a boon to trial lawyers usually allied with Democrats. But GOP leaders vowed to take up the issue again next year, when they again will have majorities in the House and Senate.
Sen. Phil Gramm, R-Texas, fought the bill to the end on grounds it overexposed taxpayers to losses, discouraged development of a private terrorism insurance market and did nothing about punitive damage awards against those hit by terrorism.
Consumer groups also opposed the bill, saying insurance companies don't need a prospective taxpayer bailout despite their pleas of economic distress.
"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," said Travis Plunkett, legislative director of the Consumer Federation of America.
