A limitless risk; Terrorism insurance.(A long-delayed vote by Congress on terrorism insurance)

Economist (US), The, November, 2002

The government, it seems, was bound to bail out the industry

WHY did Congress take such a long time to approve a federal programme for terrorist-risk insurance? Ever since September last year, insurers and their customers have been clamouring for a bill to make the government an insurer of last resort for terrorist attacks. Yet it was not until November 19th that it finally cleared the Senate, having passed the House a week earlier.

The bill makes available as much as $100 billion over the next three years to cover 90% of the losses related to terrorism. The federal programme kicks in when industry losses are greater than a certain sum ($10 billion in 2003, $12.5 billion in 2004 and $15 billion in 2005). If the losses do not reach that figure, the...

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