The House has passed legislation that would provide backup assistance for insurers to help shield them from huge claims stemming from terrorist damages. The bill, approved Nov. 29 by a 227-193 vote, doesn't provide insurers with outright federal grants, but instead authorizes what are in effect no-interest loans to insurers to cover terrorism-related claims, within limits.

The measure has the support of the Associated Builders and Contractors, U.S. Chamber of Commerce and American Insurance Association, and other groups.

Attention now shifts to the Senate, where commerce committee leaders have introduced differing proposals but no action has taken place yet.

Under the House bill, when terrorist acts lead to industry-wide insurance claims of more then $1 billion and less than $20 billion, The Treasury Dept. will pay 90% of those claims. Treasury then would recoup its payments through assessing charged to all property-casualty insurers.

If claims are less than $1 billion across the insurance industry, the bill sets up a formula for insurers to share those costs, with a provision for a per-company deductible to protect smaller insurers.

If claims rise above $20 billion, Treasury would pay 90% of the claims, up to $100 billion. Treasury would be permitted to recover those payments through surcharges on property-casualty policy premiums.