Reuters AlertNet Lite - US Senate's Dodd urges action on terror insurance

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US Senate's Dodd urges action on terror insurance

14 Nov 2006 20:31:21 GMT
Source: Reuters

WASHINGTON, Nov 14 (Reuters) - The incoming chairman of a key U.S. Senate committee said on Tuesday he wants to move quickly on a permanent solution to insuring terrorism risks, which he sees as preferable to another temporary fix.

Connecticut Democrat Chris Dodd, who will become chairman of the banking committee in January, told reporters he does not favor further extension of a program in which the government acts as insurer of last resort if private insurers cannot handle massive terrorism damages.

The temporary program is set to expire at the end of 2007.

"It's an issue we'd like to see if we can get something done early, if we go with some sort of a permanent proposal," said Dodd, whose state is home to many insurers.

"I don't want to go through another extension," he said.

After the Sept. 11, 2001 attacks, which caused insured losses of $32.5 billion, Congress approved the temporary program. It has been extended once already. Some business lobbyists want another extension.

A study from Congress' investigative unit said in September that financial losses from nuclear, biological, chemical or radiological terrorist attack are not insurable, and that it is unlikely the private market would ever expand to cover them.

The Government Accountability Office's findings were immediately seized upon by insurers who said they backed their call for the government to take a permanent role.

A Bush administration group on financial issues issued a report in the same month that said the federal program was hampering development of private-sector terror insurance.

"The earlier we can draft something ... that will bring people together, I'd like to see us try and achieve that," said Dodd, who will replace Alabama's Richard Shelby as committee chairman when Democrats take over both the Senate and House.

"Obviously, there are people downtown who have a different philosophical and ideological views ... But my hope would be to try to get something done on a permanent basis," he said.

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Last updated:Tue Nov 14 20:34:11 2006