Governor Discusses Insurance With Delegation in Washington
By Mindy Finn
WASHINGTON – Governor John Rowland came to Washington yesterday to make a pitch for federal underwriting of “terrorism” insurance. Without a federal role similar to the one that Washington plays in underwriting flood insurance, he warned, companies won’t be able to buy insurance to compensate for losses they suffer because of acts of terrorism.
The Connecticut governor met with six members of the state congressional delegation at a breakfast hosted by Democratic Sen. Christopher J. Dodd. Joseph I. Lieberman, the state’s other Democratic Senator, and four of the six members of the House delegation heard Rowland argue, as he said at a subsequent news conference, for “the importance of terrorism insurance as a way to ensure that businesses large and small will be able to continue to take care of their employees.”
Rowland said that terrorism insurance has “got to be uniformly affordable. It’s got to be underwritten by the federal government. It’s got to have a reserve.”
If insurance companies are uncertain about the cost of such insurance, he said, “they either price it so you can’t afford it or they don’t provide it–and forget the insurance companies providing it, they can’t, it’s almost impossible to gauge and to price. So the flood insurance model should be the right model for us to follow.”
Dodd expressed concern about the cost-efficiency of such a proposal. “There is more than one option,” he said. The Governor has mentioned one model, but it could be a very expensive model.” He said it was important that Congress take into account the condition of the federal budget when it considers any legislative package.
Lieberman said that he agrees that addressing the terrorism insurance issue is an immediate priority, but he added that he wants to respond realistically.
Rowland, a former insurance agent, told the delegation, “You are going to see airlines looking for terrorism insurance, you are going to see businesses in the city looking for insurance. I would compare it to flood insurance. Flood insurance is provided by the federal government. It is literally underwritten by the federal government. The reserves are there, and I’m hopeful that before Jan. 1, this Congress can respond with terrorism insurance coverage that will be a partnership with the insurance companies across this country. And that the federal government will be the backdrop, will be the reserve, will be the insurer against this peril, and it’s imperative to be building New York City.”
Rowland said that Jan.1 is a real deadline because casualty insurance for buildings are up for renewal on that date. He wondered who would insure buildings like the Empire State Building after their coverage terminates at the end of the year. “Insurance companies do not want bail-outs, they don’t want tax breaks; they want certainty. They can underwrite certainty and they can survive,” he said.
Connecticut is home to some of America’s largest insurance companies, but Rowland said the issue is “not about the insurance companies. This is about Main Street USA being able to operate.” Terrorism, he added, is a threat to businesses of every size.
“My primary concern is the future,” Rowland said, “and I know this Congress can respond.รก There is a way to do this, but I want a sense of urgency ’cause Jan. 1 a lot of things are going to happen, the airlines are going to fly, there are going to need appropriate coverage, it also effects workers’ compensation, disability, life insurance, it’s going to effect unions. So it is going to have wide impact.
“So, while we are focused on airlines right now and keeping them healthy, I want to make sure that mom-and-pop businesses can operate in New York City and Hartford, Conn.” Because of what happened on Sept. 11, the governor said, he expects many changes that could inconvenience residents of the state. But, he added, “we do live in a free, civil society, and we are going to do all we can to make sure the state of Connecticut is safe, but at the same time that free, civil society is going to allow people to move around and get on with their live.”
“We are a free society,” said Dodd, but warned “if we start identifying every potential danger, we can cause the terrorists to have a bigger victory than they have already had.”
Lieberman added, We are doing exactly what the people of Connecticut would want a state government to do, which is to take steps to prevent the critical infrastructure of the state [from being left unprotected], to be prepared for rapid response if, god forbid, anything does happen. You have an obligation and a responsibility to go on. That’s what we are doing.”
