Rep. Carolyn Maloney, D-New York, on Tuesday introduced a second iteration of the Pandemic Risk Insurance Act – legislation that would establish a federal pandemic risk backstop.
H.R. 7011, the Pandemic Risk Insurance Act of 2021, would establish a pandemic risk reinsurance program, which requires insurance companies to offer pandemic risk coverage in all critical commercial insurances, including business interruptions and special areas such as cancellation of events.
The legislation would establish a parametric program for non-injured business interruption losses. The parametric coverage would compensate companies for a portion of 180 days fixed costs and salaries.
It would also provide a pool option for insurers who do not want to directly write a primary coverage for non-damage business interruptions.
"A forward-looking, public-private partnership like this, one backed by a federal backstop, will help companies keep their employees on the payroll and cope with the storm that a public health emergency brings," the rep said. Maloney in a statement.
] The proposal was welcomed by the Washington-based Business Continuity Coalition, which represents more than 50 policyholder groups and companies in various sectors, including risk management, hospitality, real estate, retail, film and television. It called for bipartisan support for the bill.
However, the insurance group, the American Property Casualty Insurance Association, said the legislation would increase the difficulties many companies face as they continue to struggle to recover from the pandemic.
Legislation would make breakup insurance that countless small businesses rely on unaffordable or inaccessible by forcing insurers to include an uninsured risk in all breakup insurance, said Nat Wienecke, APCIA senior vice president, federal government relations, in a statement.
] "Global pandemic risk, and the resulting economic damage, cannot be insured by the private market," Wienecke said.
Like the Terrorism Risk Insurance Act adopted after the 9/1
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Covered lines under the program would include deductible insurance, work injury compensation, business interruption, commercial general liability insurance and liability insurance for directors and salaried employees. ]Rope. Maloney did not introduce PRIA legislation until May 2020 in response to the covid-19 pandemic.