Companies pressure Hill to consider reinsurance role

WASHINGTON: The push to turn the federal government into the nation's ultimate insurance company is reaching critical mass on Capitol Hill, as policyholders split from insurers and President Bush joins the fray.

WASHINGTON: The push to turn the federal government into the nation's ultimate insurance company is reaching critical mass on Capitol Hill, as policyholders split from insurers and President Bush joins the fray.

What was an effort led by the insurance industry in 2001 has become, in 2002, a broad-based campaign championed by everyone from the National Football League to the US Chamber of Commerce to the Society of American Florists. Those disparate groups, along with more than 40 others, have come together as The Coalition to Insure Against Terrorism (CTIAT).

The issue at hand is who will pay for damages in the event of another major terrorist attack. Reinsurers decided after September 11 that they would no longer cover acts of terrorism. Hence properties and companies seen as potential targets are finding themselves unable to secure insurance even as their risk increases.

Those companies believe it's the responsibility of the federal government to step in for the reinsurers, and provide the money to pay for damages if another large-scale terrorist attack should occur.

While the insurance industry and its lobbyists originally pushed legislation to make that happen (legislation that made it through the House last year), policyholders have now decided they have a better chance of getting it through the Senate on their own.

"It became clear to many in the policyholder community that as long as the issue was portrayed as an insurance issue, then it may be more difficult to get the Senate to act,

said Jay Hyde, spokesman for the CTIAT. "This is something that affects policyholders throughout the economy."

The CTIAT has taken a full-court approach to pushing the bill, running ads, seeking earned media, and lobbying aggressively in the Senate. PR and government-relations professionals from most member companies, particularly the National Association of Real Estate Trusts and The National Association of Manufacturers, are devoting themselves nearly full-time to the issue.

Goddard Clausen Porter Novelli has been retained for advertising, mostly in publications such as Roll Call and The Hill, as well as for some media relations work.

The onslaught would seem to be having an impact. Last week, President Bush publicly encouraged the Senate to pass the bill, framing the issue as a matter of national security with homeland security director Tom Ridge at his side.

The insurance industry has not backed off from the fight, however. "We're still working the issue very hard,

said Julie Rochman, SVP of public affairs at the American Insurance Association. "The difference is, in the early days, people would come to us from other industries and ask what they could do, and we'd say, 'Here are some things we are working on now.' Now, when they come to us, we say, 'The Coalition to Insure Against Terrorism.'"

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