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CNN Live At Daybreak

Lack of Insurance for Terrorism Causing Problems with Businesses

Aired August 20, 2002 - 05:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: The risk of another terrorist attack has sent insurance rates skyrocketing for many commercial properties and now terrorism insurance is a major issue for Congress to consider when law makers return from summer break.
CNN's Tim O'Brien has more for you.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Maryland has been told its insurance will be dropped, no coverage for Camden Yards, its classy new ballpark, nor for Baltimore-Washington Airport. Even the state capital faces losing its insurance.

ROBERT RUSBULDT, INDEPENDENT INSURANCE AGENTS AND BROKERS OF AMERICA: Projects in New York City, Las Vegas, Chicago with some big name companies -- the Hyatt Corporation and Steve Wynn's project in Las Vegas that would have created 16,000 jobs are not happening now. Why? They can't get loans. Why? They can't get terrorism coverage.

O'BRIEN: Last fall, the House passed a measure that would have the government cover 90 percent of the losses that exceed a billion dollars. The insurance companies would eventually have to reimburse the government.

Under the Senate bill passed last June, losses would have to exceed $10 billion before the government kicks in. But insurers would not have to reimburse the government. The Bush administration is leaning on Congress to compromise.

DAVID JOHN, THE HERITAGE FOUNDATION: The president is recognizing that this lack of action on Congress's part has clearly hurt. And he's pushing them to come to a resolution.

O'BRIEN: Opponents of any government back stop point out that the insurance industry, with $300 billion in assets, could handle half a dozen 9/11s and still be in the black. There are also those in Congress and elsewhere who have philosophical problems with government aid to private enterprise.

(on camera): Yet both houses of Congress are poised to back up the insurance industry. Their biggest differences are on the role that lawyers should play and whether there should be limits on the civil liability of those not involved in terrorism. Whatever remedy Congress settles on is expected to be temporary, lasting no more than a year or two. Tim O'Brien, CNN Financial News, Washington.

(END VIDEOTAPE)

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