U.S. terror coverage backstop to get presidential backing

Sources are reporting that a Monday meeting and press conference scheduled by U.S. President George Bush will see him calling for the federal government to put together a terrorism reinsurance plan. The Washington Post, as well as U.S. insurance industry sources say that Bush, Director of Homeland Security Tom Ridge and National Economic Advisor Larry Lindsey are expected to push for a federal “backstop” plan in light of the lack of available reinsurance coverage for terrorism risks. Other industry representatives are also expected to be present for the press conference, including those from the insurance industry.
It is speculated Bush will present this is an element of “homeland security” against future attacks. Insurance industry sources suggest that this will be part of a strategy to show political advantage over the Democratic Senate, and specifically to highlight the inability of Senate Majority Leader Tom Daschle to bring about a solution to this issue.
A bill was passed through the U.S. House of Representatives last year to lend insurers money for potential future terrorism claims, but the Senate debate was stalled on the point of litigation damages. The House bill would have put a cap on those damages, but the Senate was at loggerheads.
Industry groups representing insurance, risk managers, travel, sports, real estate and development, amongst others, have continued to push for a solution despite the Senate deadlock.
The Canadian insurance industry, through the Insurance Bureau of Canada (IBC) and the Canadian Risk Management Council (CRMC), have also been pushing the Liberal Finance Ministry to come up with a backstop solution here. However, the government has suggested it would not act until a U.S. solution was reached.