Reprinted from dailykos.com
Today, the Senate voted to reauthorize the Terrorism Risk Insurance Program, which serves as a bailout guarantee for big businesses.
Here's David Dayen on this bipartisan-approved corporate welfare program:
The Terrorism Risk Insurance Act provides a government backstop to insurance companies in the event of a terrorist attack. Tria arrived in the wake of the September 11 attacks, when it arose as a way for the government to protect the insurance companies from taking huge losses that would put them out of business after a terrorist attack.(Read the full article for a more in-depth explanation).
The rationale behind Tria is simple. Previously, there was no contract by which companies could protect themselves from terrorism costs. That was a disaster when the insured loss for 9-11 approached $40bn, with most of it paid by insurance companies and the firms who insure them, known as reinsurers.
The appeal is clear -- to insurers, who have been raking in cash. Over 60% of all businesses have purchased government-subsidized terrorism insurance since 2002. The program has cost the government $1m a year -- almost nothing -- but has made an estimated $40bn in revenue for insurance companies, who have never paid a claim, or given a dime to the government for their reinsurance protection.
The bill just voted on reauthorizes the program for six more years and raises the threshold for the government to begin paying out terrorism insurance claims from $100 million to $200 million.