Associated Press
WASHINGTON — The Bush administration and key lawmakers have drawn up the outlines of a government aid package that would help the insurance industry withstand future terrorist attacks. They hope to introduce legislation next week.
Under the proposal, the industry would finance the first $10 billion in payments after a future attack, and the government would pay 70 percent to 90 percent of costs after that, an administration official said Saturday. The exact percentage remains to be decided.
The agreement came after a meeting Friday with Treasury Secretary Paul O’Neill and Sen. Paul Sarbanes, D-Md., the Banking Committee’s chairman; Sen. Phil Gramm of Texas, the committee’s senior Republican; and Sen. Chris Dodd, D-Conn., also a member of the committee, the official said.
The money would come from general revenues, Treasury Department spokeswoman Michele Davis said.
"An attack on the United States is an attack on all taxpayers," she said.
Major reinsurance companies, which assume part of the risk covered by insurance firms, have said they won’t renew terrorism coverage after Dec. 31, when many contracts expire. U.S. insurance companies that write property policies could face payouts of $30 billion to $50 billion for the attacks on the World Trade Center and the Pentagon.
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