Bush urges Senate action on terrorism insurance

As expected, U.S. President George Bush used a Monday press conference to tout the importance of a federal backstop for terrorism insurance. In a speech to labor leaders, Bush urged the Senate to pass a bill creating a federal program to offer terrorism reinsurance to insurers, citing lost jobs and stalled construction projects resulting from a lack of available coverage.
Calling the plan “a jobs issue”, Bush says, “If people can’t buy insurance on a construction project, they’re not going to build the project. And if they don’t build the project, somebody’s not working.”
He says the lack of terrorism reinsurance and the resulting inability of insurers to offer the coverage to their commercial clients was an unintended consequence of the September 11 terrorist attacks. Despite criticism from some sources that there is no hard evidence of lack of insurance affecting the economy, Bush says there is ample evidence in the slowdown in non-residential construction rates to justify concern.
He also pointed to examples, such as a Hyatt Corporation project in downtown Chicago, and a Nevada resort that could provide 16,000 jobs as projects that have been stalled by investors not wanting to take part in new buildings without terrorism insurance coverage.
And while Bush’s speech focussed on current economic issues, he also acknowledged that part of the need for terrorism coverage lies in the possibility of future attacks, which could devastate economy. “It would make it really hard for the economy to recover a second time if there is an attack without adequate terrorism insurance.”
Late last year, the U.S. House passed a bill that would offer loans to insurers to coverage a large portion of losses from a terrorism attack. However, the Senate came up with a plan that would see the government act as a more traditional excess reinsurer. However, the real stalling point was the provision for limiting tort access following terrorist attacks. Bush says “I know that we can work with the House version, if it’s somewhat different, to get something done quickly.”