Senate Banking Subcommittee Turns Attention to Future Pandemic Risk Proposals

On July 22, the U.S. Senate Banking Subcommittee on Securities, Insurance and Investment held a hearing on “Examining Frameworks to Address Future Pandemic Risk.” PIA submitted testimony in advance of the hearing. If Congress legislates on this issue, PIA favors the use of a public-private partnership. In the past, similar steps have been taken to create markets for flood and terrorism risk insurance and, while it would be challenging, the insurance community can do it again for pandemics using a public-private partnership.

For over a year, PIA has been actively engaging on this issue with policymakers, including through participation in a congressional roundtable and by submitting testimony for a House hearing last Congress. In the 117th Congress, PIA is reevaluating existing proposals for addressing future pandemics, but our guiding principles for any potential legislative solution remain the same:

  • Utilization of Public-Private Partnership: If Congress considers a legislative solution to a future pandemic, PIA views a government backstop in the form of a public-private partnership as the best possible method of providing commercial policyholders with coverage for pandemics.
  • Affordability for Small Businesses: A potential legislative solution must be affordable for businesses of all sizes, including small businesses.
  • Deployment of Existing Insurance Framework: PIA members prefer to work within the framework of the insurance industry. We favor proposals that use the existing insurance framework over those that would require insurance agents to deliver a non-insurance product to consumers.
  • Focus on the Future: Proposals should be future focused. They should allow businesses to properly budget for pandemic risk protection and make considered, informed decisions about their participation in any federal program. We strongly oppose any proposal that would retroactively rewrite existing contracts containing business interruption (BI) exclusions.

PIA will continue to engage with policymakers on this issue.