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Terrorism insurance plan
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October 9, 2001: 6:55 a.m. ET
Senators to propose U.S.-sponsored fund to replace private coverage.
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NEW YORK (CNNmoney) - Several U.S. senators are planning to propose -- perhaps as early as Tuesday -- a government-sponsored insurance fund to cover terrorism related losses, according to an insurance lobby group.
Julie Rochman, a spokeswoman for the American Insurance Association (AIA), told CNNfn that Sens. Christopher Dodd, D-Conn., and Charles Schumer, D-N.Y., are set to propose a privately financed, privately run insurance fund. This would make the government an insurer of last resort to help property and casualty insurers cover losses from terrorism.
The government plan would cover anything above and beyond what the insurance companies could not pay for.
Since the Sept. 11 attacks on New York and Washington, reinsurers have not been offering new terrorism coverage. As of Jan. 1, all existing terrorism coverage between reinsurers and property and casualty insurers expires; after that, the AIA said reinsurers will not offer terrorism coverage anymore.
This is a similar system to reinsurance coverage of Israel, United Kingdom and Spain, according to Rochman. 
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