Sen Shelby says terror insurance deal close

By Kristin Roberts

WASHINGTON (Reuters) – The chairman of the U.S. Senate
Banking Committee on Friday said the House and Senate were near
a deal to extend government guarantees to cover losses from
terrorism before the program expires in 15 days.

Alabama Republican Sen. Richard Shelby, holding up a thumb
and forefinger close together, said: “We’re that close.”

“It’s basically the Senate bill,” he told Reuters, when
asked for details.

Congressional sources and lobbyists familiar with the
discussions, however, said Senate negotiators had rejected most
of the compromises offered by the House and were pushing for
much of the Senate’s original bill.

“They’re not giving anything,” said one source of the
Senate strategy, adding “that could change in a minute.”

The House and Senate have passed separate and distinct
bills to extend the Terrorism Risk Insurance Act (TRIA),
enacted after the September 11, 2001, attacks on the United
States to create a temporary program of shared compensation for
losses from terrorist attacks.

Congressional staff have been working informally this week
on a last-minute compromise bill — legislation that the
insurance and property industries call critical to the U.S.
economy.

Sources close to the discussions said few issues remained
in the negotiations, but that one was a proposal requiring
mandatory payback of federal assistance to insurers.

Time, however, is running out.

TRIA expires December 31, and while Shelby expressed hope
that a deal would be struck Friday, any agreement would need to
be approved by both the House and Senate.

The House has hoped to finish its work for the year over
the weekend. The Senate could remain in session into next week,
members have indicated.

TRIA was enacted as a temporary program aimed at keeping
construction and the economy moving when wary insurers were
reluctant to offer coverage.

Under the program, insurers must make terrorism coverage
available and in return, the U.S. government guarantees it will
bear a large percentage of future losses above certain
thresholds.

The property and insurance industries have pushed for an
extension, arguing they remain unable to judge the likelihood
of attack and therefore cannot price policies. But the White
House and many Republicans have opposed extending TRIA without
curbing taxpayers’ potential liability.

The Senate’s version of the bill has won the Bush
administration’s support because, according to the White House,
it narrows the program.

By contrast, the administration has criticized the House
bill, saying it would expand the program to cover damage from
attacks by domestic terrorists like the 1995 Oklahoma City
bombing. It also would add group life insurance to the lines
covered.