[Congressional Record Volume 148, Number 147 (Thursday, November 14, 2002)]
[House]
[Pages H8802-H8809]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page H8802]]
     CONFERENCE REPORT ON H.R. 3210, TERRORISM RISK PROTECTION ACT

  Mr. OXLEY. Mr. Speaker, pursuant to House Resolution 607, I call up 
the conference report on the bill (H.R. 3210) to ensure the continued 
financial capacity of insurers to provide coverage for risks from 
terrorism.
  The clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to the rule, the conference report 
is considered as having been read.
  (For conference report and statement, see proceedings of the House of 
November 13, 2002, at page H8722).
  The SPEAKER pro tempore. The gentleman from Ohio (Mr. Oxley) and the 
gentleman from New York (Mr. LaFalce) each will control 30 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).


                             General Leave

  Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on the conference report.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. OXLEY. Mr. Speaker, I yield myself 6 minutes.
  September 11, 2001, will go down in history as one of the most tragic 
days in American history as a foreign terrorist network unleashed a 
devastating attack against our Nation, killing or injuring thousands 
and causing greater insured losses than all recent natural disasters 
combined. This attack not only destroyed the lives of innumerable 
innocent people from all corners of the world, but it was also intended 
to disrupt the very center of America's financial infrastructure.
  Fortunately, the American people and our economy proved stronger and 
more resilient than anyone could have imagined. Under the leadership of 
our President, we have fought back, destroyed the terrorist launching 
pad, and fortified our borders and financial infrastructure security. 
We absorbed the terrorists' best hit, and our financial system and our 
will remain as strong as ever.
  In the insurance industry not a single American firm was rendered 
insolvent and insurers were able to expedite claims payments to rush 
aid to those most in need.
  The one weak link in our comeback has been the foreign reinsurance 
market, which since 9/11 has been understandably uncomfortable with 
providing further coverage for terrorist attacks. An effective 
insurance industry relies on spreading risk as broadly as possible, in 
the case of reinsurance across the entire globe. American insurers rely 
on foreign reinsurance to protect their solvency against truly 
catastrophic events. Insurers simply cannot responsibly provide 
protection for American businesses without some sort of financial 
backstop, and where the foreign private sector can no longer fill that 
role we must step in to protect our economy against the threat of 
future attacks.
  A recent Real Estate Roundtable survey cited more than $15 billion in 
real estate projects across the U.S. being delayed or canceled because 
of their terrorism exposure. If the building projects do not go 
forward, it means that the architects, engineers, construction workers, 
and realtors do not work. Our economy will continue to be impaired and 
thousands of American jobs will continue to be lost. We cannot afford 
to allow the terrorists this victory. We must act.
  Another survey found that 84 percent of responding American 
businesses do not believe their companies have sufficient coverage in 
the face of another terrorist attack and 71 percent find it difficult 
or impossible to obtain adequate coverage. We survived 9/11, but 
without a reinsurance backstop for terrorism, another attack could 
force thousands of companies into bankruptcy with no protection or 
recourse. At a time when we are preparing for war in the Middle East 
and facing repeated terrorism security warnings in the United States, 
we cannot afford not to have a Federal backstop in place.
  President Bush immediately realized the significance of this economic 
problem and called on the Congress to pass legislation soon after 9/11 
and has been tirelessly pressing Congress for legislation ever since. 
The House quickly answered this call with passage of legislation last 
November 1 a year ago and now stands ready to deliver. We have worked 
closely with the President and the Senate to draft strong bipartisan 
legislation that is pro-consumer, pro-taxpayer and pro-business. This 
legislation, the Terrorism Risk Insurance Act, will provide a Federal 
backstop for Americans to protect against future catastrophic terrorist 
attacks. We provide American businesses with immediate protection upon 
enactment while long-term contracts are being negotiated. The Federal 
backstop then phases out over time with insurers paying a steadily 
increasing deductible of 7 to 15 percent of their premiums before the 
Federal catastrophic protection kicks in.

                              {time}  2100

  As the reinsurance market flows back in, the Federal involvement 
would phase out in 3 years.
  We also provide full protection for the American taxpayers. The 
conference report provides for full payback of any Federal assistance, 
with the first 10 to $15 billion of losses required to ultimately be 
borne by the insurance industry as mandatory retention and payback. The 
remainder will be recouped based on economic conditions.
  Consumers are provided with mandatory availability of terrorism 
coverage and with a significant disclosure to improve their competitive 
options.
  This bill is absolutely necessary to the well-being of the American 
economy to protect U.S. jobs and against future terrorist attacks. We 
need this backstop in place now.
  I would be remiss if I did not point out the considerable 
contributions made by my colleague and subcommittee chairman, the 
gentleman from Louisiana (Mr. Baker). Without his hard work and 
dedication, this legislation would not have been possible. Also I 
recognize the important contributions to protect Americans by our full 
committee ranking member, the gentleman from New York (Mr. LaFalce), 
and our subcommittee ranking member, the gentleman from Pennsylvania 
(Mr. Kanjorski), here in the House, as well as Senators Dodd, Sarbanes 
and Gramm.
  Our House conference report was signed by every single conferee on 
our committee, and its bipartisan support is a testament to the work of 
the President and these Members.
  I just want to take this opportunity to thank my good friend, John 
LaFalce. I think he is probably handling his last bill in his role as 
ranking member on the committee. But I want to personally thank him for 
his dedication and service to our Nation, and particularly his hard 
work on this very, very important legislation on terrorism insurance. 
We have worked continuously for the last 2 years, and I just cannot say 
enough about his dedication and hard work. We are going to miss you, 
John, and all of the opportunities we have had to work together on 
numerous issues; and we wish you the very best in your retirement.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. LaFALCE asked and was given permission to revise and extend his 
remarks.)
  Mr. LaFALCE. Mr. Speaker, I thank the gentleman from Ohio very, very 
much for his very kind comments. It, too, has been a pleasure working 
with him, especially the past 2 years during his chairmanship of the 
Committee on Financial Services.
  Mr. Speaker, after very many fits and starts, the terrorism 
reinsurance package will finally become a reality, despite persistent 
opposition by many in this body who stalled passage of this bill for 
almost a year by seeking to unfairly limit the rights of victims 
resulting from a terrorist attack.
  Our Nation has been faced with numerous economic dislocations as a 
result of the September 11 attacks as it continues to prepare for the 
specter of future attacks. A case in point is the legitimate concern 
raised that the market relating to terrorism coverage has evaporated, 
forcing primary insurers to increase prices or withdraw coverage, so we 
have had both an unavailability and an unaffordability problem.
  This is not an insurance industry problem, because if the insurance 
industry cannot reinsure the risk of future terrorist attacks, or will 
not, it

[[Page H8803]]

will either not offer terrorism coverage or will price it out of the 
reach of most consumers and leave areas of the country particularly 
susceptible to terrorist attacks without coverage, and, most 
importantly, stall or scuttle future building projects. The 
consequences of such action for our economy and for consumers, should 
this continue, could be devastating.
  The conference report achieves what I believe is an acceptable 
balance. The bill makes insurance available by constructing a short-
term Federal backstop with minimal government intrusion into the 
insurance market by ending 3 years after a private sector mechanism 
emerges. In addition, it requires significant contributions by industry 
that keeps industry on the hook for substantial losses, thereby 
protecting the American taxpayer.
  More importantly, the bill also avoids making this important economic 
package a Trojan horse for tort reform, a favorite of many in this body 
and many in the White House, some of whom worked long and hard for over 
a year to derail this bill in order to advance what I consider to be an 
ideological agenda at the expense of economic growth and the protection 
of American businesses.
  Rather, the bill before us tonight provides for prudent measures that 
protect the interests of taxpayers and maintains the legitimate rights 
of victims by, one, creating an exclusive Federal cause of action 
governed by applicable state law for all suits for property loss, 
personal injury or death arising out of a terrorist event; secondly, 
consolidating claims into a single Federal district court; and, third, 
ensuring that the Federal Government will not be directly or indirectly 
responsible in its role as a reinsurer for any punitive damages.
  I support this important response to mitigate the economic fallout 
from the threat of future attacks on this Nation, and I urge my 
colleagues to support this conference report, as I have and all the 
Democratic conferees have, and then I would urge the President to sign 
it into law swiftly.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from New Jersey (Mr. Ferguson), a valuable member of the 
committee, as well as the conference committee.
  Mr. FERGUSON. Mr. Speaker, I thank the chairman for yielding me time.
  Mr. Speaker, I rise today in strong support of this terrorism 
insurance legislation that is crucial to our economic security in this 
Nation. This year alone the lack of terrorism insurance has terminated 
or delayed billions of dollars' worth of commercial property financing. 
Across this country we have seen hospitals, office buildings, malls, 
stadiums and museums among the many facilities that are having 
difficulty finding terrorism coverage.
  With commercial development stalling, workers are also missing out on 
jobs. That is why it is imperative that we pass this terrorism 
insurance legislation to protect American jobs and strengthen our 
economy as we protect ourselves against future terrorist attacks.
  Without coverage, the economic impact of another terrorist attack 
would indeed be devastating. The U.S. could face a string of 
bankruptcies, loan defaults and layoffs that would intensify the blow 
of the attack. As a conferee on this legislation, I am proud to say 
that we have produced legislation that is a direct response to the 
uncertainty in the insurance market that is hindering the economy and 
costing American jobs.
  Under this legislation, private insurance would pay for damages up to 
a certain amount, and the Federal Government would guarantee against 
catastrophic losses. By establishing a temporary risk-spreading program 
to shore up the insurance market, it will help provide much-needed 
confidence and certainty, while also minimizing government regulation, 
which would only go into effect if a terrorist attack occurred. It will 
also effectively limit market disruptions, encourage economic 
stabilization, and facilitate the transition to a viable private market 
for terrorism risk insurance.
  Most importantly, we have carefully crafted a package with much-
needed taxpayer protections, including mandatory payback and 
recoupment. This ensures the availability and affordability of 
terrorism insurance in the market, while also maintaining the 
flexibility to protect taxpayers and policyholders.
  I applaud President Bush and the gentleman from Ohio (Chairman Oxley) 
for their determination and leadership in moving this legislation that 
will strengthen our economic security. I urge my colleagues to support 
this terrorism insurance legislation to help create jobs, strengthen 
economic growth, and reduce the impact of any future terrorist attack.
  Mr. LaFALCE. Mr. Speaker, I yield 5 minutes to the gentleman from 
Pennsylvania (Mr. Kanjorski), the distinguished ranking member of the 
Subcommittee on Capital Markets, Insurance and Government Sponsored 
Enterprises responsible for the terrorist insurance bill.
  Mr. KANJORSKI. Mr. Speaker, I rise in support of the conference 
report on the Terrorism Risk Insurance Act. We need this economic 
stabilization to provide an inoculation for our ailing economy.
  Since last year's terrorist attacks, insurance rates for businesses 
have risen significantly across the country. One recent report by the 
Insurance Information Institute found that insurance rates have 
increased by 30 percent or more after last year's terrorist attacks. 
One of the primarily factors contributing to these dramatic increases 
is the lack of terrorism insurance.
  The failure to create a Federal terrorism insurance backstop has also 
had serious implications for our economy. As the report of the Joint 
Economic Committee found, the problems associated with terrorism 
reinsurance pose a significant threat to sustained economic growth. The 
Real Estate Roundtable found that the lack of terrorism insurance 
availability for commercial properties has resulted in the cancellation 
or delay of $15 billion in real estate deals, resulting in the loss of 
potentially 300,000 fewer good-paying construction jobs.
  Terrorism insurance is critical to protecting jobs and promoting 
America's economic security, whether in Wilkes-Barre, Scranton, or 
Hazleton, Pennsylvania, or in New York City. The issue of terrorism 
insurance may also affect our national economy more immediately and 
more drastically than any tax or spending issue that Congress has 
considered in recent years. Without Federal intervention in the 
insurance marketplace, our already-sluggish economy will likely 
experience increased instability in the near future.
  The conference report before us today is workable; it is an effective 
compromise, one that provides substantial financial protection. I am 
pleased that the conference report contains a number of provisions 
which I advocated. For example, the legislation designates the 
Secretary of the Treasury as the administrator of the program and 
clearly authorizes auditing powers and penalties.
  Additionally, I worked to ensure that this conference report allows 
the Treasury Secretary to consider the effect of payback surcharges on 
urban, smaller commercial, and rural areas and on different lines of 
insurance. These considerations are important because they will ensure 
that the individual policyholders will be treated fairly and a small 
business, a farmer or other rural policy holder will not be asked to 
disproportionately subsidize losses associated with national symbols 
like a skyscraper or large manufacturing plant.
  Moreover, through the process of considering this bill, I have worked 
to adapt the simplest, cleanest bill to get us through the period of 
uncertainty until the private sector can price the terrorism 
reinsurance.
  Mr. Speaker, this bill should have been before the Congress a year 
ago. We worked diligently in the subcommittee; and if the report of the 
subcommittee had been presented to this floor a year ago, I am 
convinced in my own mind there would have been well over 420 votes to 
support it. Unfortunately, as the ranking member of the committee 
indicated, this got caught up in ideology and other factors, trying to 
make it a locomotive, if you will, to handle tort reform.
  I think this is a perfect example of how we could start the new year 
and the new Congress in recognizing that partisanship and special 
interests or

[[Page H8804]]

ideologies should not be made part of public policy. We can start by 
looking at this case as a case in chief as to how legislation can be 
accomplished and how it cannot be accomplished and why 1 year lost of 
construction time and investment is not worth the attempt to win some 
political point or political benefit.
  I compliment the chairman of the committee and the chairman of my 
subcommittee; and particularly I want to compliment, pay respect to, 
the ranking member from western New York. Without his diligence and 
without their diligence, we probably could be arguing until the cows 
come home.
  Fortunately, everybody realized that America needs this bill. The 
insurance industry, which is probably the least likely industry that 
wants Federal involvement, recognized that this is a role government 
should play. But most of all, Mr. Speaker, the American people and the 
American economy need this bill.
  I urge my colleagues to support this conference report to their 
fullest extent.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from Texas (Mr. DeLay), the majority whip, soon to be 
majority leader.
  Mr. DeLAY. Mr. Speaker, I thank the chairman for yielding me time.
  Mr. Speaker, the chairman has done a lot of hard work on this bill, 
and I rise today to support the terrorism insurance legislation before 
us and to highlight the important work still to be done on this issue.
  I had my doubts about this legislation from the very beginning. The 
most accurate assessment of the risk to Americans is developed by the 
private marketplace, free from government interference. However, 
terrorism insurance is not always available, and sometimes it is 
available only at prices people cannot pay. But the most troubling 
aspect of this bill is the flaw that leaves American taxpayers holding 
the bag and trial lawyers running away with the loot.

                              {time}  2115

  The House passed a bill containing strong liability protections. The 
most important was an outright ban on punitive damages. We now have a 
conference report that lacks this ban.
  Mr. Speaker, President Bush's top four economic advisers explained it 
best in a June 10 letter. They said very directly, ``Punitive damages 
are designed to punish criminal or near criminal wrongdoing. American 
companies that are attacked by terrorists should not be subject to 
predatory lawsuits. The availability of punitive damages in terrorism 
cases would result in inequitable relief for injured parties, and 
threaten bankruptcies for American companies.''
  I wish these were the only problems with this bill. But the most 
troublesome aspect is the prospect that taxpayer dollars may be 
negotiated away in an out of court settlement. There is no sufficient 
mechanism in this bill to protect a raid on the Treasury by predatory 
trial lawyers.
  Unfortunately, there is an industry in America today that profits 
from tragedy and suffering. Businesses and property owners and victims 
who have lost their lives are innocent bystanders in terrorist attacks. 
My concern is that we are handing this industry additional tools to 
take advantage and compound these tragedies.
  President Bush repeatedly said during this election that we need to 
stand with the ``hard hats'' and not the trial lawyers, and I agree 
with that.
  However, this bill falls very short of the President's intent. The 
Wall Street Journal described its weaknesses as a ``bonanza for trial 
lawyers.''
  I raised these concerns with President Bush. He agreed that there is 
more work left to protect victims of terrorism and the Federal 
Treasury, and he pledged to work with us next year to resolve these 
flaws.
  I want to thank President Bush for that pledge to protect the 
taxpayers.
  As long as I have been in Congress I have guarded the taxpayers, and 
we are working to fix the problems with this bill.
  We are going to lock the doors of the Federal Treasury against trial 
lawyers who would exploit flaws in this new law to soak the taxpayers.
  I am going to stand with hard-working Americans. I am going to stand 
with those ``hard hats,'' and I am going to oppose anyone who seeks to 
plunder the Federal Treasury.
  Mr. LaFALCE. Mr. Speaker, I yield 4 minutes to the distinguished 
gentlewoman from Manhattan (Mrs. Maloney).
  Mrs. MALONEY of New York. Mr. Speaker, I thank the gentleman for 
yielding me this time and for his fine leadership on this committee and 
on this legislation.
  I rise in strong support of the conference report for the Terrorism 
Risk Protection Act, which provides a Federal safety net in the form of 
a loan program to the insurance industry in the event of another 
terrorist attack.
  September 11 cost the insurance industry more than $40 billion and 
many insurers have since dropped terror insurance completely or hiked 
premiums to extreme levels.
  The lack of comprehensive and affordable terrorism insurance has 
blocked billions in development deals, halting construction and costing 
jobs.
  The bill provides loans to insurers for 90 percent of damages over a 
deductible and can apply to terrorist events over $5 million. Very 
importantly, it sunsets 3 years after passage.
  This is an economic stimulus bill for New York City and the country.
  Cathy Wylde of New York City Partnership estimates that passage of 
this bill will add 1 percent to the GDP of New York City, and some 
economists believe it will have the same impact for the Nation. It is 
extremely important to get our economy moving again. It is about jobs, 
putting people to work, and not letting terrorists cut off credit.
  One example of the impact of the lack of terror insurance is the 
situation facing the managers of the Conde Nast building in Times 
Square. This 48-story property is a New York City landmark that houses 
a publishing empire and the famous NASDAQ market site from which the TV 
networks broadcast updates on the stock market.
  While the building's owners have always carried insurance to cover 
the $430 million mortgage, after September 11 terrorism coverage 
insurance alone for the building skyrocketed to $5 million a year. The 
building's owners were unable to pay this high amount while the bank 
holding the mortgage demanded that they carry full coverage. As my 
colleagues might expect, this situation has led to prolonged 
litigation.
  Passage of this legislation will resolve the situation for the Conde 
Nast building and for many other properties like it across the Nation.
  Importantly, this is not just a New York City or New York State 
problem.
  According to a recent report by the Mortgage Bankers Association, the 
lack of terrorist insurance has led to downgrades by the rating 
agencies of commercial real estate property around the country. The MBA 
alone believes the downgrades have cost its industry $8 billion in 
canceled or delayed projects.
  I am very pleased that today's bill contains a compromise on the tort 
reform issue.
  Finally, I want to thank the chairman of the committee, and to the 
Democratic leader of the Committee on Financial Services, I want to 
thank very much the gentleman from New York (Mr. LaFalce) for his 
tireless work on this issue and so many others. He stood for principle 
throughout consideration of the debate on this bill and, I would say, 
all legislation before the committee. We will truly miss his 
contributions to the Committee on Financial Services and to this 
Congress. I believe this will probably be the last bill that the 
gentleman will manage on the floor and we appreciate very much the 
gentleman's wonderful leadership and all of his fine work for his 
district, New York State, and I would say for the country.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 4 minutes to the 
gentleman from Louisiana (Mr. Baker), the chairman of the Subcommittee 
on Capital Markets, Insurance and Government Sponsored Enterprises.
  Mr. BAKER. Mr. Speaker, I appreciate the chairman yielding me this 
time and certainly want to compliment his leadership on this most 
important matter, and certainly the gentleman from New York (Mr. 
LaFalce) and the

[[Page H8805]]

gentleman from Pennsylvania (Mr. Kanjorski), who have worked tirelessly 
with us to propound a resolution to this most difficult problem.
  The important point I wish to speak to tonight is the significance of 
the mechanism by which we assist the industry while requiring repayment 
of taxpayer dollars. When one of these tragic events occurs, certainly 
the most important thing we can do is to keep our economy working and 
not have the tragic event of terrorism which takes the lives of 
innocent human beings, which causes the destruction of properties, to 
extend into the workforce and cause people to lose their employment by 
the loss of construction jobs or other opportunities. Without the 
passage of this act, should there be another unfortunate event, which 
all of us hope never occurs, we would face very uncertain times.
  The industry was able to respond, gratefully, to the horrific events 
in New York, but capital is depleted and we do not know what ability 
they may have if we suffer an event on such a grand scale again.
  Tonight we are responding to those eventualities by saying yes, we 
will help industry, we will help you in times of short-term liquidity, 
when your bank account is low, when you have paid out the claims and 
you cannot meet the next obligation, but we are going to require that 
industry to put their money up first; we do not go to the taxpayer as 
the first stop. But then we say to those companies, here is the 
taxpayer loan and it is in fact a loan where we are going to enable you 
to continue to operate by extending credit to you during this time of 
crisis, but we are going to expect you to pay it back.
  That is a unique standard. This House has acted in other areas of 
concern relating to business operation in times of terrorist attack and 
we have not required the extension of taxpayer funds to be repaid. 
Tonight, we establish a new standard. Yes, we are willing to help big 
business; yes, we are willing to do what is necessary to keep our 
economy going, but when the economy returns and the industry is 
enjoying a profit, we are going to expect to get our money back. I 
think that is not only entirely appropriate, but the highest standard 
of conduct for this committee to have exercised. We should not ever 
open the taxpayer checkbook to industry of any sort without demanding a 
high standard of conduct. Tonight we are setting it: You are going to 
give us the money back.
  Now, the Secretary of the Treasury does have the discretion, should 
we be in desperate economic circumstance where the imposition of the 
repayment would not be wise, meaning it would raise the premiums on 
homeowners, on business owners, or that the industry simply could not 
generate the resources to pay the money back. So we have a balanced 
approach. We say yes, we will help in times of crisis and we expect you 
to pay us back, but if economic conditions do not warrant it, the 
Secretary of the Treasury shall report to this Congress why he believes 
that the repayment should not occur. I think this is an excellent 
balance utilizing common sense and taxpayer resources to do that which 
we all are driven to do: to ensure that our economy functions, that 
terrorists do not win, that innocent working people are not harmed, and 
that at the end of the day our economic interests are protected.
  I wish to commend all of the parties who have contributed mightily to 
this effort and say, job well done.
  With regard to those issues concerning punitive damages, I agree with 
our whip. I do believe that we should be very careful in opening the 
doors to allow those who choose to file unwarranted litigation and 
suits and take 30 or 40 or 50 percent of the award that is granted, 
particularly in the area of punitive damages, for no apparent public 
policy reason, and I hope it is an area that with the President's 
leadership we can return to next year and resolve in the favor of the 
American taxpayer.
  Mr. LaFALCE. Mr. Speaker, I yield 4 minutes to the gentleman from 
Texas (Mr. Bentsen), a departing Member of Congress and a very 
distinguished representative who is here with his lovely daughter to 
witness what I think will probably be his final remarks in Congress.
  Mr. BENTSEN. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I want to say at the outset what a pleasure it has been to 
serve with the gentleman from New York (Mr. LaFalce) on the Committee 
on Financial Services.
  I rise in strong support of the conference report. I want to echo the 
comments of my colleague from Louisiana, because I think he does 
understand the prudent nature of this legislation. I for one have been 
one who is concerned about the extension of government credit where 
markets already exist which can provide for that. What we learned in 
the aftermath of the despicable attacks of September 11 was that in 
addition to the human carnage there was also an economic fallout, 
particularly as it related to the insurance market. In effect, the 
insurance market for terrorism which heretofore had been a very narrow 
and inexpensive market basically was unpriceable. One could not buy it 
at any price. And as such, not only were existing loans on commercial 
structures out of compliance with their loan documents, but innumerable 
new projects were halted because lenders were not able to, or were not 
comfortable to provide credit where the risk of terrorism would not be 
covered by the insurance market.
  So it became necessary for the Congress to act.
  We started looking at this issue shortly after September 11, 2001, 
and as the gentleman from New York and the gentlemen from Ohio and 
Louisiana will recall, we had a number of issues that were thrown on 
the table. We had the reinsurers who were here, hat in hand, and wanted 
a program much like what Great Britain has done with the City of London 
and expanded across the entire nation; we had the Treasury Secretary 
and the administration that was here with a proposal which, quite 
frankly, would have put the taxpayers I think, and I think the majority 
of the committee felt, a little bit too much on the hook than we felt 
was the appropriate way to go. Actually, over time, a pretty sensible 
bill was crafted, bipartisan bill was crafted, primarily with the 
leadership of the gentleman from Ohio and the gentleman from Louisiana, 
and I was proud to join them on that legislation, along with the senior 
Senator from the State of Maryland.
  As we went forward, the principle that the gentleman from Louisiana 
espoused became very clear, and it was that the government would 
provide a backstop using the credit of the American taxpayer, but that 
we would not do it forever, that it would have a sunset, and that there 
would have to be some payback mechanism; that if we were going to 
extend the credit, we needed a way that we could recoup the losses to 
the taxpayer.

                              {time}  2130

  As the gentleman said, that was a rather unprecedented approach. It 
has survived in this legislation, and it was not supported across the 
board by a number of Republicans and Democrats, but it did survive. I 
think a lot of credit goes particularly to the gentleman from Louisiana 
(Mr. Baker), because he was quite adamant in that regard.
  In addition, I want to address the question of tort, because we 
discussed that in the committee when we first moved the bill on this 
side of the street. I have to take issue with the comments of my dear 
colleague, the gentleman from Texas (Mr. DeLay), my neighbor in Texas, 
the majority whip, soon to be majority leader. As I see the final 
conference report, there are a number of changes that are designed to 
protect the taxpayers from excessive litigation: number one, all tort 
claims are consolidated; number two, they are all Federal claims and 
not State claims; number three, if I read it properly, no claims can be 
made against Federal taxpayer dollars.
  There are some who, unfortunately, sought to use this bill as a proxy 
for the issue of tort reform. Yet I do not think that was what the 
gentleman from Ohio, the chairman, wanted to do; and quite frankly I do 
not think that is what the gentleman from Louisiana wanted to do, 
because they understood what the core problem was.
  Over the last year and a half, almost, that we have been working on 
this legislation, I have yet to meet one business leader, one 
commercial developer, one insurance person who has said that the tort 
issue is an issue that must be

[[Page H8806]]

addressed. The concern they had was that there was no insurance market 
available and that development had come to a screeching halt.
  Tonight, we finally have a product which is prudent for the American 
taxpayer, which sets a very fine precedent going forward for future 
Congresses as they look at the extension of Federal credit. I hope our 
colleagues will adopt this package. I wish we could have done it 
sooner, but thank goodness we are doing it now. I commend the chairman 
and the chairman of the subcommittee, and my colleague, the gentleman 
from New York, and the ranking member for the work they have done.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me recognize my good friend, the gentleman from 
Texas (Mr. Edwards), who also is involved in his last bill on the 
floor, at least for a while. He has been a principled member of our 
committee and has provided reasoned judgment throughout a number of the 
issues that the committee has dealt with over the last 2 years. I want 
him to know he has my personal thanks and recognition for his excellent 
work.
  Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. 
Kelly), chairman of the Subcommittee on Oversight and Investigations.
  Mrs. KELLY. Mr. Speaker, I thank the gentleman from Ohio for yielding 
time to me.
  Mr. Speaker, on September 11, our world fundamentally changed with 
the cowardly act of a handful of terrorists. Passage of this bill 
represents another significant step in our efforts to address the new 
realities we confront.
  This bill addresses the fact that one of the key objectives of the 
terrorist networks is to disrupt our economy. The losses of September 
11 and the continued terrorist threat demonstrate that we must provide 
basic protections for our economy.
  The September 11 attacks resulted in the largest single hit to our 
insurance industry in history. Since then, businesses and insurance 
markets have faced a new reality. Insurers are being asked to insure 
terrorism risk when they have no realistic way to determine the fair 
price for that risk, or, in the vast majority of cases, being able to 
obtain any reinsurance for it.
  Moreover, no one can presently calculate the proper odds for where or 
when the next attack will occur. We do know, however, that our 
government officials believe that we should expect additional attacks. 
Consequently, the vast majority of insurers have been reluctant to 
cover terrorism, especially for major buildings, factories, or 
gathering places.
  Where terrorism insurance is available or is required by law, 
insurers are now charging high premiums for it and offering very 
limited capacity to protect against the risk of insolvency. I believe 
that the GAO put it best when they testified before my oversight 
committee that ``large companies, businesses of any size perceived to 
be in or near a target location, or those with some concentration of 
personnel or facilities, are unlikely to be able to obtain a meaningful 
level of terrorism coverage at an economically viable price.''
  Hospitals have been especially hard hit by this terrorism insurance 
crisis. Representatives of some of the New York hospitals testified 
before my subcommittee that they have seen a 256 percent increase in 
their coverage of their insurance rates for only one-third of the 
previous coverage. It is only one example of the crisis. I have many, 
many more and will insert letters into the Record which demonstrate 
this.
  It is clear that the current lack of terrorism coverage acts as a 
chill factor, restraining our economy. We heard that businesses, 
particularly in cities and near potential targets, wanting to build are 
being required to carry terrorism insurance. However, there is little 
or no terrorism coverage available, so some new construction is being 
stopped before it can even start. This is causing the loss of new jobs 
at a time when creating jobs should be one of our highest priorities.
  In short, the failure to act quickly on terrorism insurance 
legislation is imposing a fear tax on America, costing real jobs when 
the country is trying to pull out of a recession.
  In addition, the administration says that another terrorist attack is 
extremely likely, and we must plan now for how the government should 
react to an attack; now, not after another attack. We have learned 
countless lessons from September 11 on homeland security, and the need 
for this legislation is one of them.
  This conference report is a good solution to the problem and deserves 
our full support. I ask my colleagues on both sides of the aisle to 
join me in support of jobs by voting for this conference report.
  I thank the gentleman from Ohio (Chairman Oxley) for his leadership, 
and I thank his wonderful staff for their work on this issue.
  Mr. Speaker, I include for the Record the following letters regarding 
terrorism insurance:

                                                     July 8, 2002.
     Hon. Sue Kelly,
     House of Representatives, Longworth House Office Building, 
         Washington, DC.
       Dear Congresswoman Kelly:  Our members, the owners, 
     institutional investors and others in real estate in New York 
     City, appreciate the leadership you have provided in dealing 
     with the critical problem of the absence of adequate 
     terrorism insurance coverage.
       I understand from a recent conversation with one of our 
     members, Douglas Durst, that you are interested in having 
     some specific examples of the problems the absence of 
     terrorism insurance coverage has created. Those examples 
     follow:
       4 Times Square, also known as the Conde Nast building, is 
     in litigation with its lender due to the absence of terrorism 
     insurance coverage. The lender, La Salle Bank and CIGNA has 
     threatened to invade the ``lock box'' into which rents are 
     deposited in order to buy $430 million in terrorism 
     insurance, the amount of the mortgage. The insurer for the 
     portfolio held by the owners of 4 Times Square has refused to 
     write coverage for this building claiming it is ``high 
     profile.'' The owners have recently obtained $100 million in 
     terrorism insurance but without no coverage for biological or 
     chemical events. As for the remaining $330 million dollars in 
     coverage the lenders require, the courts will resolve whether 
     the money to buy such coverage, if available, can be claimed 
     from the cash flow of the property. Should the courts 
     determine that the cash flow can be invaded for this purpose, 
     the full interest due to the investors holding certificates 
     will not be paid, the rating services will downgrade the 
     securities which are already on the Moody's watchlist, and 
     the individuals who invested will see their investment 
     eroded. Meanwhile, the owner-builder of 4 Times Square has 
     equity of $450 million invested in this $880 million building 
     and no coverage. That owner, who typically would be investing 
     in the construction of a new building is stymied.
       A lending officer at HypoVereinsbank, the major 
     construction lender in the nation, has advised us that at 
     least 5 major construction projects in his portfolio are not 
     going forward until the terrorism insurance situation is 
     resolved. HypoVereinsbank wants full terrorism coverage 
     including biological and chemical causes as well as certainty 
     that for the duration of construction the insurance will be 
     available. Four of these projects are in New York, the fifth 
     in Chicago. Andy Veith, the lending officer will try to reach 
     you later this week either by phone or e-mail.
       Downtown, a one million square foot office building owner 
     could not obtain refinancing for the underlying mortgage of 
     approximately $200 million because terrorism insurance was 
     unavailable. Finally, a lender agreed to go forward if the 
     owner committed to pay $41 per square foot for stand alone 
     terrorism insurance coverage. At the same time that the owner 
     faced that $1 million additional drain on the cash flow of 
     the building, he also had to absorb an increase of from 
     $110,000 to $550,00 over the prior year's cost of insurance. 
     This additional cost, in addition to excluding terrorism 
     risk, does not cover mold or biological, nuclear or chemical 
     events whether terrorist generated or otherwise. The owner 
     now has $1,440,000 additional insurance expenses with less 
     comprehensive coverage on the environmental risk side than 
     before, and has to self-insure for the equity that he has 
     invested in the property.
       A REIT portfolio, which includes major office complexes in 
     Boston, San Francisco, D.C. as well as a trophy midtown 
     Manhattan building, can get only $250 million in terrorism 
     coverage for the entire portfolio worth several billion. If 
     there is one more terrorism incident, it is likely that even 
     this limited coverage will be lost given its not uncommon 30-
     day cancellation clause.
       Other examples from across the country, including 
     hospitals, stadiums, major transportation centers and other 
     vital private and public investments that are not covered by 
     terrorism insurance, along with a vivid description of the 
     ripple effect this problem is having on the overall economy, 
     appear in the May 23rd Joint Economic Committee report to 
     Congress.
       It is most important that enactment of some form of 
     government temporary back up for terrorism insurance coverage 
     occur quickly.

[[Page H8807]]

       We appreciate your efforts to resolve this critical 
     problem.
           Sincerely,
                                                  Deborah B. Beck,
     Executive Vice President.
                                  ____



                                            Wien & Malkin llp,

                                       New York, NY, July 9, 2002.
     Re insurance.

     Hon. Susan Kelly,
     Longworth House Office Building,
     Washington, DC.
       Dear Congresswoman Kelly: Thank you for your efforts to 
     date to highlight the extremely difficult insurance market 
     for commercial real estate owners and developers in New York 
     City and other major cities across the United States.
       Our firm represents a portfolio of over 8,000,000 square 
     feet of office space located in Manhattan, including the 
     Empire State Building that as a result of the events of 
     September 11th, is once again the tallest building in New 
     York City. I feel that our recent experience trying to renew 
     the insurance for these buildings underscores the problems 
     that Congress needs to address.
       The maximum amount of property insurance that we have been 
     able to obtain at any price is $200 million dollars for this 
     portfolio, less than half of our coverage of the $550 million 
     maintained for the past 12 months. This level of insurance is 
     significantly below replacement cost of any one of our 
     properties, leaving our investors with significant risk.
       Of even greater concern, this $200 million dollar program 
     does not cover any loss between $75 million and $100 million. 
     This ``hole'' in coverage further places our investors at 
     risk and limits our ability to obtain future financing.
       The program outlined above specifically excludes any act of 
     terrorism. We have only managed to secure a $25 million 
     dollar terrorism program because of insurance providers' 
     general unwillingness to issue coverage in New York City. We 
     also found it necessary to purchase a $50 million pollution 
     liability program in the event of a chemical or biological 
     attack because such an attack is excluded from the terrorism 
     program noted above. Despite the drastic reduction of 
     coverage, the premium for this program has increased an 
     astonishing 500%.
       In summary, it is clear that the insurance industry has 
     opted to limit its exposure in major cities, resulting in 
     reduced capacity, limited competition, and exorbitant 
     pricing. The insurance industry's unwillingness to provide 
     adequate levels of coverage at reasonable rates will 
     translate into higher rents for tenants (to whom increased 
     operating expenses are generally passed under typical lease 
     clauses), fewer new construction projects and a general 
     depression in the real estate market as the inability to 
     shift certain risks historically assumed by the insurance 
     industry drives people from the market.
       I hope this information will help you in your continuing 
     efforts to persuade your colleagues to rectify this 
     situation.
           Very truly yours,
                                                  Peter L. Malkin.

  Mr. LaFALCE. Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from California (Mr. Cox).
  Mr. COX. Mr. Speaker, I thank the gentleman for yielding time to me.
  I rise in support of this legislation, which is urgently needed and 
has been urgently needed since September 11, and particularly since 
November of 2001, when this House first passed it.
  By backstopping the market's provision of terrorism insurance, this 
legislation will be a boon for new construction everywhere in America. 
But construction cannot get completed in America because financing is 
not available, and the reason financing is not available is that 
terrorism insurance is not available. This bill will fix that. By 
taking a huge, unquantifiable risk out of the equation, we will make 
writing terrorism insurance feasible again and will help Americans get 
back to work and start growing the economy.
  We are dealing with this bill much later than we should be, many 
months after it should have been completed, because there has been a 
disagreement about protections against abusive litigation. This bill 
that we are voting on tonight is imperfect in that respect. Several of 
the protections of taxpayers' interests and the national interest that 
were built into this legislation in the original House-passed version 
have been deleted. These differences are not minor.
  From the original House bill, we have eliminated a prohibition on 
punitive damages. We have eliminated fair-share liability for 
noneconomic damages, such as pain and suffering, and a requirement that 
attorneys' fees be reasonable. I do not believe that any of these 
provisions should be eliminated; but in the very brief time that I have 
remaining, Mr. Speaker, I will address just one of them: fair-share 
liability for noneconomic damages.
  When the U.S. Government certifies that the terrorists were 
responsible, it should not be possible for lawyers to come in and 
assert, because of 1 percent liability found or prospectively that 
might be found for another party, that 100 percent of the obligation 
should rest there, particularly when we are talking about noneconomic 
damages; that is to say, completely notional damages like pain and 
suffering, things that lawyers can gin up by asserting it, merely by 
asserting it in a complaint. In each of these circumstances, the 
taxpayers will be made liable.
  Mr. Speaker, we need to fix these flaws in the bill immediately when 
the 108th Congress convenes. On that understanding, I am supporting 
this bill because it is so desperately needed to put America back to 
work.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from Connecticut (Mr. Shays), a valuable member of the 
committee and a member of the conference committee.
  Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, following the terrorist attacks of September 11, the 
Committee on Financial Services moved quickly to study the lack of 
availability of terrorism insurance. Under the leadership of the 
gentleman from Ohio (Chairman Oxley) and the subcommittee chairman, the 
gentleman from Louisiana (Mr. Baker), we held hearings, met with 
financial experts, and alternately passed legislation to create a 
Federal insurance backstop to cover losses in the event of future 
terrorist attacks.
  The legislation we are considering today is consistent with the bill 
passed by the House last November. Like its predecessor, it addresses 
the availability and affordability of terrorism insurance while 
protecting taxpayers and policyholders. It gives insurance companies 
the assistance they sought without giving them a blank check.
  Mr. Speaker, the economy may be growing, but it sure does not feel 
that way. This bill is truly one of the keys to getting our economy 
back on track, spurring development, and creating jobs. I urge all of 
my colleagues to approve this measure and send it to the President, 
because it is not a question of if but when, where, and what magnitude 
we will face a terrorist attack using conventional weapons or, just as 
likely, weapons of mass destruction. The casualties could be large and 
the liability beyond comprehension.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I support this bill; and I encourage everyone to vote 
for it. It is a shame we were not able to pass it a year ago, about the 
time we reported our bill out of committee and passed it on the floor 
of the House; but I do think this is a much better bill now than the 
one we passed earlier.
  Mr. Speaker, I yield back the balance of my time.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this, as I indicated in my opening remarks, is a very, 
very important piece of legislation. It is critical that the Congress 
act. The President has called for us to act.
  Let me cite from an article today in The Washington Post regarding 
the threat of attack that ``terrorist groups may be planning a new wave 
of attacks on Western targets. Even before the purported bin Laden tape 
surfaced on the al-Jazeera satellite network on Tuesday, the CIA, FBI, 
and National Security Agency had detected a significant spike in 
intelligence chatter over the previous 10 days that strongly indicated 
new assaults are being planned, officials in U.S. intelligence agencies 
said.''
  In congressional testimony last month, CIA Director George Tenet 
warned that recent attacks in Yemen, Kuwait, and Bali signal an 
escalation in terrorist activity which he characterized as ``as bad as 
it was last summer, before the airliner hijacking assaults on the World 
Trade Center and the Pentagon.''
  ``That threat environment level was high then and it has not 
lessened,'' a senior administration official said yesterday. ``Bin 
Laden's appearances have always been carefully orchestrated, and 
unfortunately, they have often presaged a major al Qaeda attack or 
development.''
  Mr. Speaker, it is time that this Congress act. I appreciate the 
strong bipartisan support that this legislation has

[[Page H8808]]

entertained over the last several months. This is a good example of 
Congress at its best, but it is even more important that we provide 
this framework for protection of the American economy. This bill does 
exactly that. I ask my colleagues for strong support for this 
conference report.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, the September 11 terrorist 
attacks have devastated many industries and sectors changing the 
landscape of the American economy, including the insurance industry.
  The legislation before us today, H.R. 3210, is a reasonable piece of 
legislation and I am particularly pleased that the majority has shown 
the wisdom of removing the tort liability limitation provisions of the 
legislation. I joined my colleagues on the Judiciary Committee and 
those on the Financial Services Committee who worked hard to eliminate 
Section 15, a tort reform provision, which would effectively have 
banned punitive damages in terrorism-related cases. This provision was 
absolutely unnecessary.
  This passage of this measure is important because the insurance 
industry has stated that, while it will be able to cover the estimated 
$40 billion in claims resulting from the Sept. 11 terrorist attacks, 
any new and renewed policies will not cover terrorist-inflicted damage 
unless the government helps cover that unknown liability. This is an 
issue of great concern to Congress and to the nation.
  This legislation can make a great difference. Earlier this year, we 
acted swiftly and deliberately assisting the Airlines industry in the 
amount of $15 billion to save this important industry which was so 
severely devastated by the September 11 attacks. I am glad that we have 
come to an agreement that will allow us to act with bi-partisan 
sensibility to help this important sector of our economy as well.
  This is not just an insurance industry problem. Rather, it is a 
national issue because if the insurance industry cannot reinsure the 
risk of further terrorist attacks, it will either increase premiums to 
the detriment of consumers, or simply stop offering terrorism coverage 
altogether. Furthermore, without adequate insurance coverage, lenders 
will not be able to lend and new investments will not be made, creating 
a credit crunch that could further devastate our economy.
  Under this bill ``each insurer will be responsible for paying out a 
certain amount in claims a deductible--before Federal assistance 
becomes available. This deductible is based on a percentage of direct 
earned premiums from the previous calendar year, and rises from 7 
percent during the first year to 10 in year 2 and 15 percent in year 3. 
For losses above an insurer's deductible, the Federal government will 
cover 90 percent, while the company pays 10 percent.''
  ``If the Federal government pays for insured losses during the course 
of a year, the Treasury Secretary will be required to recoup the 
difference between total industry costs (individual insurers' losses up 
to their deductibles, plus the industry's 10 percent cost share above 
the deductibles) and the following fixed dollar amounts per year: $10 
billion for year 1, plus the last few months of 2002; $12.5 billion for 
year 2; and $15 billion for year 3. The recoupment will be accomplished 
through a surcharge on policyholders. The Secretary has discretion on 
the timing of the surcharge, but the surcharge cannot be more than 3 
percent of the premium paid for a policy in a given year. Losses 
covered by the program will be capped at $100 billion; above this 
amount, Congress is to determine the procedures for and the source of 
any payments. The Secretary may assess civil penalties on participating 
insurance companies for submission of false or misleading information 
or failure to repay the Secretary for any amount required to be 
repaid.''
  I lend my support to this bill. Congress can and must act to protect 
the most vulnerable sectors of our economy, and those who most need 
assistance. The underlying bill holds the promise of protecting the 
insurance industry and the millions of Americans dependent on it. The 
version of the bill before us today goes a long way toward restoring 
confidence to our nations lenders and should help bolster our 
struggling economy. As such, I urge my colleagues to support the 
measure before us tonight.
  Mr. NEY. Mr. Speaker, I just want to take a quick moment to comment 
on an important part of this legislation, group life insurance. H.R. 
3210 contains a study of group life insurance and I would like to 
clarify that it was the intent of the House that the term ``group life 
insurance,'' as it appears in the text, is used in it's typical and 
customary sense to mean ``an insurance contract that provides life 
insurance coverage, accidental death coverage, or a combination of both 
for a number of persons under a single contract and that provides such 
coverage on the basis of a group selection of risks.''
  Mr. BEREUTER. Mr. Speaker, this Member rises today to express his 
support for the conference report of the Terrorism Risk Protection Act 
(H.R. 3210). This conference report will help ensure that businesses 
are able to acquire property and casualty insurance while still 
providing taxpayer protection against terrorist losses. This Member is 
pleased that the House and Senate conferees have reached an agreement 
on terrorism insurance which President President George W. Bush is 
expected to sign. This Member is a cosponsor of H.R. 3210, which the 
House first passed on November 29, 2001, by a vote of 227-193.
  This Member would first like to thank the distinguished gentleman 
from Ohio (Mr. Oxley), the Chairman of the House Financial Services 
committee, for both introducing this legislation and for his efforts in 
bringing this conference report to the House Floor. Additional 
appreciation is expressed to the distinguished gentleman from Louisiana 
(Mr. Baker) who also played a crucial role in crafting the conference 
report on H.R. 3210. Moreover, this Member would also like to thank the 
distinguished gentleman from New York (Mr. LaFalce), the Ranking 
Minority Member of the Financial Services Committee, for his bipartisan 
cooperation and assistance on this conference report.
  The uncertainty caused by the terrorist events on September 11, 2001, 
has resulted in the possibility of serious problems for the insurance 
industry and the insured from additional severe terrorist attacks. To 
illustrate this, reinsurance companies provide insure against massive 
losses for insurance companies. Since this terrorist attack, many 
primary companies, because they cannot receive reinsurance, have sent 
notice cancellations to businesses indicating that they will not 
receive coverage for losses caused by terrorist activities. If both 
small and large businesses continue to be unable to receive insurance, 
it will contribute to the further instability of the American economy. 
Insurance provides a very important element of the stability needed by 
businesses to continue functioning and investing and for bankers to 
continue lending to businesses.
  As a Member of the House Financial Services Committee, which has 
jurisdiction over the important elements of the limited Federal role in 
commercial insurance, this Member supports this conference report for 
the following two reasons. First, obviously it helps ensure that 
commercial insurance continues to be available for businesses--and 
available at affordable costs. Second, it provides necessary taxpayer 
protections against possible severe terrorist losses to businesses.
  Under this conference report, a temporary Federal terrorism insurance 
program would be established within the Treasury Department. Under this 
program, Federal funds would be provided to property and casualty 
insurance companies when losses reach the ``trigger'' level. In 
particular, Federal funds would pay 90 percent of the terrorism-related 
losses of insurance companies that exceed 7 percent of the company's 
premiums in 2003; 10 percent of a company's premiums in 2004; and 15 
percent of a company's premiums in 2005. Each insurance company would 
pay for 100 percent of insured losses up to those thresholds and 10 
percent of the losses above those levels. This Federal terrorism 
insurance program would cover industry-wide losses up to $100 billion 
per year.
  It is also very important to note that this conference report 
provides for the mandatory repayment of some of the Federal funds used 
to cover insured losses. Under this conference report, for 2003, the 
insurance industry must repay the Federal assistance which is the 
difference between the sum of all insured losses paid by the industry 
and $10 billion. For 2004 and 2005, these repayments would be made for 
the difference between the sum of all insured losses and $12.5 billion 
and $15 billion, respectively. These repayments would be collected 
through a surcharge on the policies of all commercial insurance 
policyholders. Therefore, this conference report is not an insurance 
company bailout; it protects the American taxpayer against a big hit 
while continuing to maintain insurability against terrorist attacks.
  Furthermore, this conference report also provides taxpayer protection 
from punitive damages in lawsuits which claim terror-related losses or 
injuries. To illustrate this, this conference report requires all 
terror-related lawsuits to be considered in Federal court, rather than 
in state courts. Moreover, this conference report does not set a 
Federal standard for awarding punitive damages in terror-related 
lawsuits. However, it instead allows the state law in which the 
terrorist act occurred to prevail with respect to punitive damages. 
Most importantly, the conference report requires that punitive damages 
awarded through these lawsuits will not be paid for by Federal funds 
used to cover losses from terrorism. For my Nebraska constituents, it 
is important to note that punitive damages are not allowed under 
Nebraska state law in Nebraska state courts.
  In conclusion, Mr. Speaker, this conference report balances the need 
of businesses to continue to receive commercial insurance

[[Page H8809]]

against terrorist acts at affordable costs, with taxpayer liability 
protection. As a result, this Member urges his colleagues to support 
the conference report of H.R. 3210.
  Mr. OXLEY. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Simpson). Without objection, the 
previous question is ordered on the conference report.
  There was no objection.
  The SPEAKER pro tempore. The question is on the conference report.
  The conference report was agreed to.
  A motion to reconsider was laid on the table.

                          ____________________