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Institute for Crisis, Disaster, and
Risk Management
Crisis and Emergency Management
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NOTICE: The ICDRM's monthly emergency managment forum, held at the GWU |
| February
2003
Volume 4 - Number 1 |
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Links:
Current events
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Report on the Terrorism Insurance Bill
By Ana Lucia Hill
The absence of terrorism insurance became a clear problem for the US economy after the attacks of September 11. Both, the Executive and Legislative powers recognized that the growth of the economy had been hurt as a result of the decision of many insurance companies not to cover construction and real estate projects. Thus, in December 2001, the House of Representatives passed a legislation that would make the federal government a safety net for insurance companies in the event of another attack. The Senate passed its own version of the bill in June 2002. During the negotiations of the Bill, President Bush urged for a bipartisan effort, putting politics aside, to reach an agreement on the terrorism insurance “[f]or the good of the economy, for the good of workers who needs jobs…”. The private sector also participated in the process sending recommendations to both leaders in Congress on what should clearly be integrated into the bill. Among those recommendations were to present a clear definition of ‘terrorism’ to ensure coverage of future attack –including domestic terrorism; provide comprehensive coverage, and to fully cover business interruption. Finally on November 18, 2002 the Senate approved the Terrorism Insurance Act of 2002 (TRIA). The House of Representative had passed the same version of the legislation the week before. It is November 26, 2002, the day in which President Bush signed into law a bill that will help insurance companies cover the cost of claims in the event of future terrorist attacks. Legislation believed to be designed to facilitate the creation of an insurance market to cover losses caused by acts of terrorism. According to information of the US Treasury Department this new law “establishes a temporary Federal program that provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism, in order to protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty insurance for terrorism risk. In addition, it will allow for a transitional period for the private markets to stabilize, resume pricing of such insurance, and build capacity to absorb any future losses, while preserving State insurance regulation and consumer protections”. The Terrorism Insurance Act of 2002 is a program within the Department of Treasury, for further and/or detailed information visit its website at: www.treasury.gov/trip To review a summary of the main provisions of the Terrorism Insurance Act of 2002 please visit: http://www.aon.com/about/publications/issues/2002_terrorism_risk_act.jsp For an analysis on the Final Bill please visit: http://www.miller-insurance.com/downloads/lmbc.pdf |