Washington, D.C. - The Council for Citizens Against Government Waste (CCAGW) today urged the Senate to pass similar legislation to the Terrorism Risk Protection Act (H.R. 3210), passed on November 29.  CCAGW believes this is a step toward addressing a very difficult issue: calculating the risk and providing affordable insurance for future terrorist attacks on the United States.  In a letter to senators, CCAGW President Tom Schatz said:

"Due to the terrorist attacks on September 11, many insurance companies, particularly reinsurance companies have stated that calculating risk for future attacks is impossible.  Therefore, the industry has stated that they will no longer offer terrorism coverage unless the government steps in to provide last-resort reinsurance coverage.  If businesses were unable to get terrorism insurance, the U.S. would face massive economic problems.  For example, it would be next to impossible to obtain construction and mortgage loans."

"CCAGW believes any measure passed in the Senate must adopt the following principles espoused in the House bill:

"1.  The insurance industry must pay back any federal assistance provided to cover claims for future terrorism attacks.  Taxpayers should not be left holding the tab.  The Senate draft proposal would start the government assistance after only a small percentage of a company’s premiums are lost, a real giveaway of taxpayers’ dollars.

"2.  Tort reform measures should be included to reduce frivolous and punitive lawsuits.

"3.  Encouraging all insurance companies, including reinsurers, to participate and not excluding any particular part of the industry.  In addition, there should be no mandate that insurance companies provide terrorism coverage.

"CCAGW is certainly open to changes or improvements in the House bill, such as a higher deductible or repealing the tax penalty, which currently makes it difficult to accrue reserves to pay for man-made catastrophes such as terrorist attacks.  But we remain firmly committed to the three principles espoused above.

"We all fervently hope that we will never see again such monstrous events as those of September 11.  Taxpayers have been called upon again and again to respond to these horrific incidents and they have done so willingly.  But it is important for Congress to be vigilant and to protect taxpayers whenever possible.  The House proposal provides a market-based, risk-sharing solution to a serious crisis, but at the same time does not put the taxpayer permanently on the hook for insurance losses.  The Senate should should do the same."

CCAGW is the lobbying arm of Citizens Against Government Waste, the nation’s largest taxpayer advocacy group with over one million members and supporters nationwide.  It is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.