WASHINGTON — The Senate on Friday voted to renew a post-Sept. 11 act providing federal safeguards for the insurance industry in the event of a devastating terrorist attack.
The voice vote extended for two years the Terrorism Risk Insurance Act, while putting more of the financial burden on the insurance industry.
"Sept. 11 proved that there needs to be a mechanism in place to allow the economy to rebound more quickly and to protect American jobs in the unfortunate event of another terrorist attack," said Senate Democratic leader Harry Reid, D-Nevada.
The bill extends the terrorism insurance act that was to expire on Dec. 31 while increasing from $5 million to $50 million in 2006 and $100 million in 2007 the amount of property and casualty losses that would trigger federal payments.
It reduces coverage in the program by excluding commercial vehicles, theft, surety and other items and raises the deductibles for insurers before federal help begins.
After the deductible is reached, the federal government covers 90 percent of insured losses in 2006 and 85 percent in 2007.
The White House, in a statement, expressed support for the Senate bill, saying it sends the proper signal to the marketplace that the program is envisioned to be temporary and is consistent with administration goals of encouraging private markets and reducing taxpayer exposure.
The American Insurance Association, in a statement, said enactment of the legislation before the current law expires is essential for U.S. economic security. The House is expected to take up the measure soon.
The original TRIA was enacted in 2002 in response to the economic slowdown and reluctance of investors and construction companies to initiate new projects because of concerns that they would be unable to obtain insurance needed to cover devastating losses.
Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.