The federal government would directly absorb up to 90 percent of losses from an act of terrorism under a plan being developed by the Bush administration.
Under the plan revealed yesterday, losses from a terrorism event would be shared between private insurers and the government.
Specifically, the program would run for three years, with private insurers and the government sharing different percentages of losses each year.
Beginning in 2002, private insurers would pay 20 percent of insured losses for the first $20 billion of losses resulting from a terrorist event. The government would pay 80 percent. Above $20 billion, private insurers would pay 10 percent and the government would pay 90 percent.
In 2003, private insurers would pay 100 percent of the first $10 billion of losses.
