19 June 2002 22:43 [Source: ICIS news]
WASHINGTON (CNI)--US industrial leaders hailed Wednesday the long-awaited Senate approval of federal subsidies for terrorism insurance.
National Association of Manufacturers (NAM) vice president Michael Baroody said: "Manufacturers are pleased that the Senate has recognised the critically important nature of this problem that has vexed our economy for many months."
The US House of Representatives approved similar legislation seven months ago.
Although they differ in some respects, both the House and Senate bills would provide government backing for insurance companies if they are once again forced to cover massive claims in the event of another terrorist attack.
But there are some major differences that will have to be worked out by a House-Senate conference committee before a final measure is sent to President George W Bush for his signature.
Baroody added: "A federal backstop is crucial for manufacturers and other commercial interests that have faced double- and triple-digit increases in property and casualty premiums and workers' compensation insurance since 11 September."
Senate passage was "absolutely necessary to keep the process moving," he added, "but we're still hopeful it can be improved in conference, particularly with respect to some reasonable limit on liability."
The bill passed by the Democratic-controlled Senate does not shield companies from punitive damages, while the legislation approved by the Republican-led House in November limits lawsuits and bans punitive damages.
Many US industrial segments, including chemicals, have been pressing for federal action on terrorism insurance after most insurers in the wake of the 11 September attacks limited or dropped coverage for casualty and property losses due to terrorism.
NAM is the nation's largest organisation of manufacturers; its 14 000 members include the major producers of chemicals, plastics and pharmaceuticals.
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