Major Differences Between House and Senate Versions May Hamper Conference Consideration Roughly nine months after the September 11 attacks on New York and Washington, the Senate passed a measure on Tuesday, June 18 that would provide federal monies to the property and casualty industry to cover future terrorism-related losses. Under the measure (S 2600), introduced by senior Senate Banking Committee member Christopher Dodd (D-CT), the government would cover 90 percent of terrorism-related claims made to commercial property and casualty insurance companies for the remainder of this year. Government aid would kick in after the costs of future insurance claims exceed $10 billion, and would be capped at $100 billion.

The House passed a terrorism insurance bill last November (HR 3210), but competing versions of a Senate bill stalled action on the measure until last week. Differences between the Senate measure – which passed by an overwhelming 84-14 vote – and the House bill will be hammered out in what will likely prove to be a difficult conference.

The structure of the House bill is substantially different than that of the Senate measure; for example, HR 3210 would require insurance companies and commercial policyholders to repay the government as much as $20 billion. Also at issue is whether to ban punitive damage awards in terrorism-related civil lawsuits. While the House bill contains such a ban, the Senate legislation does not address issues of legal liability. A June 10 letter from several Bush administration officials indicated that the White House may veto the legislation if it does not include such provisions.

Many anti-poverty advocates are critical of what have been called the “insurance industry bailout” measures, arguing that the industry has a long record of redlining in low-income and minority communities – problems they would like to see addressed before Congress uses tax dollars to prop up the insurance industry. In addition, some advocates argue that if there are future terrorist attacks, billions of dollars of federal funds may be diverted from critical programs to pay off insurance claims. This would mean less money available for federal programs, including those benefiting low and moderate income Americans.

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