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WASHINGTON, DC-Terrorism insurance legislation moves on to the president’s desk following the US Senate’s passage of the bill in a vote of 86 to 11 last night. Terms of the federal backstop call for the government to cover 90% of terrorism claims beyond the $10 billion mark, with a cap of $90 billion The legislation is a three-year deal, with the $10 billion mark increasing to $12.5 billion in 2004, then $15 billion in 2005.

“Enactment of the Terrorism Risk Protection Act (HR 3210) will help facilitate a return to normalcy in the insurance market,” says Martin DePoy, spokesman for the Coalition to Insure Against Terrorism and vice president of government relations for the National Association of Real Estate Investment Trusts. “The legislation putsbusiness insurance policyholders on the path to greater economic security. It should lead to more availability and greater affordability in the terror-insurance marketplace, while at the same time encouragingeconomic growth by spurring job creation and new investment.”

Passage of the terrorism insurance bill marks the Senate’s final action of this lame-duck session. President George W. Bush had made the legislation a key issue, citing the enormous loss of jobs and revenue due to developers’ inability to secure terrorism insurance on new projects. One of the main factors that hindered Congress’s progress on the bill was the partisan dispute over allowing victims to sue companies for punitive damages. Bush and Republican members were eager to prohibit terrorism-related punitive damages lawsuits, but the ban did not make it into the final bill. The president is expected to sign off on the legislation.

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