President Signs Terrorism Insurance
Bill --
Reaction Of Senate Judiciary Chairman Patrick Leahy
[WASHINGTON (Tues., Nov. 26) –
President Bush Tuesday signed into law a bill that will help insurance
companies cover the cost of catastrophic claims in the event of future
terrorist attacks. The legislation will help builders secure
insurance at cost-effective rates. Following is the reaction of Sen.
Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee, who
worked on the bill and helped clear the way to its enactment.]
“At a time when the
American people are looking for Congress to take effective and
measured action to protect them from acts of terror and to jump-start
our economy, this bill is a shining example of bipartisan cooperation.
“It will boost our
economy by offering extra protection against terrorist attacks for
buildings and construction projects, and that will mean new jobs in
Vermont and across the nation. President Bush is right that this
legislation is essential for our future economic growth. The U.S.
Chamber of Commerce has declared that this bill will improve the legal
rights of plaintiffs and defendants and, importantly, will help
American workers and the economy, and I agree.
“I worked with
Majority Leader Daschle, Senator Dodd, Senator Sarbanes, Senator
Schumer and others to craft a balanced compromise on legal procedures
for civil actions involving acts of terrorism covered by the
legislation. The final version protects the rights of future
terrorism victims and their families while providing federal court
jurisdiction of civil actions related to acts of terrorism,
consolidating such cases on a pre-trial and trial basis, and excluding
punitive damages from government-backed insurance coverage under the
bill. These provisions do not limit the accountability of a private
party for its actions in any way.
“With language
identical to the Senate-passed bill, this bill also fully protects
federal taxpayers from paying for punitive damage awards. Under the
conference report, only corporate wrongdoers pay punitive damages, not
U.S. taxpayers.
“The final bill
rejects the special legal protections in the House-passed bill. The
liability limits for future terrorist attacks in the House-passed bill
were irresponsible because they restricted the legal rights of victims
and their families and discouraged private industry from taking
appropriate precautions to promote public safety. For example, the
House-passed bill would have protected a security firm from punitive
damages if it hired incompetent employees or deliberately failed to
check for weapons and a terrorist act resulted. Restricting damages
against a wrongdoer in terrorism-related civil actions involving
personal injury or death, for example, could discourage corporations
from taking the necessary precautions to prevent loss of life or limb
in a future terrorist attack. There is no need to enact these special
legal protections and take away the legal rights of victims of
terrorism and their families.
“The threat of
punitive damages is a major deterrent to wrongdoing. Eliminating
punitive damages under the House-passed bill would have severely
undercut this deterrent and permitted reckless or malicious defendants
to find it more cost effective to continue their wanton conduct
without the risk of paying punitive damages. Without the threat of
punitive damages, callous corporations could have decided it is more
cost-effective to cut corners that put American lives at risk. The
House’s approach failed to protect public safety, and the conferees
rightly rejected it.
“The final bill
includes provisions to help captive insurance companies participate in
the federal backstop program. Many captive firms deal in property and
casualty lines, but some do not. Senator Jeffords and I strongly
supported language in the final bill to allow those captives in
property and casualty the option of participating in the program while
not requiring other captives to start offering terrorism risk
insurance.
“The State of
Vermont is the premier U.S. domicile for captive insurance companies.
Vermont's captive owners represent a wide range of industries
including multinational corporations, associations, banks,
municipalities, transportation and airline companies, power producers,
public housing authorities, higher education institutions,
telecommunications suppliers, shipping companies, insurance companies
and manufacturers, among others. Since 1981, Vermont has averaged
approximately 25 captives licensed annually, and those numbers are on
the rise. Vermont closed 2001 with 38 new captives – 37 pure and 1
sponsored – for a total of 527 at year end. The first half of 2002
set a record pace with 26 new captives licensed in Vermont, according
to the Vermont Department of Banking, Insurance and Health Care
Administration.
“This is a bill that
will do what it is supposed to do, and it does it responsibly.”
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