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Thursday, January 8, 2015

Congress Passes Measure to Cover Terrorism Risk

Today's post is shared from
WASHINGTON — The Senate on Thursday gave overwhelming final congressional approval to a revamped federal backstop to terrorism insurance, just eight days after lawmakers allowed it to lapse. Businesses had pleaded for the bill, saying it was necessary to avoid losing some important investments.

But to win passage, Democrats had to grudgingly assent to an easing of regulations on exotic financial instruments, known as derivatives, by some users.

The first bill to pass the Republican-controlled 114th Congress offered a glimpse of how Republicans will try to chip away at President Obama’s agenda over the next two years.

The bill passed the Senate 93 to 4, a day after the House approved it 416 to 5. President Obama is expected to sign it.

Developers, insurance companies and real estate firms were growing increasingly anxious after Congress allowed federal terrorism insurance to lapse at the end of the year. Within days, about 750,000 private insurance policies were canceled, following clauses that said they could exist only if the federal government were prepared to shoulder some of the costs in the event of a catastrophic attack.

Many other policies had 30-day or 60-day notification clauses, so continued congressional inaction would have resulted in growing costs. But those costs would not have been clear unless terrorists actually struck.

“It was the equivalent of everyone deciding they’re not going to be inoculated against measles,” said Robert P....

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