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opednews.com Headlined to H1 1/11/15

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Reprinted from dailykos.com


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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:

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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.

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.

(Read the full article for a more in-depth explanation).

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.

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