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Thursday, January 8, 2015

Senate renews terrorism insurance program

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WASHINGTON — The Senate voted Thursday to revive a federal terrorism insurance program to help protect American companies from devastating losses in potential terrorist attacks.

Senators voted 93-4 to renew the program, which expired on Dec. 31 after efforts to extend it were blocked by then-senator Tom Coburn, R-Okla., who is now retired. The program's expiration raised fears by commercial developers and the owners of sports and entertainment companies that they would no longer be able to obtain the terrorism insurance they are required by their lenders to have.

Insurance companies have been reluctant to offer terrorism insurance without the federal backstop, which is now designed to help reimburse businesses for catastrophic losses above $200 million.

The program previously would kick in when losses exceeded $100 million, but lawmakers wanted to reduce the potential burden for taxpayers. They also increased the percentage that insurers must pay above that threshold from 15% to 20%. The program has never had to pay out since it was created in 2002 in the wake of the 9/11 terrorist attacks.

Developers credit it with reviving commercial development in New York City and throughout the nation.

A new Congress convened this week and made renewal of the program one of its...

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