Since the spring of 2020, when proposals intended to prepare for the economic consequences of a future pandemic began to emerge, PIA has been actively engaged with policymakers on this important issue.
To that end, PIA supported the 2020 Pandemic Risk Insurance Act (PRIA), introduced by Rep. Carolyn Maloney (D-NY). That bill tried to make pandemic risk insurance available the same way terrorism risk insurance was made available after the attacks of Sept. 11, 2001. The 2020 version of PRIA would have permitted insurers to voluntarily opt into a program whereby any business interruption (BI) provision offered by a participating carrier would include coverage for BI resulting from a pandemic, and, in exchange, the federal government would cover 95% of losses incurred in a covered event.
Unfortunately, the legislation reintroduced this week is substantively different from its predecessor, and PIA is unable to support it. Our main concerns include but are not limited to the expansion of the scope of the proposal to all commercial P&C lines of business that could be affected by pandemics and the mandatory offer provision.
This 2021 proposal would apply to a much broader range of losses than the original bill, which focused exclusively on pandemic BI coverage. With these changes, the bill would require coverage for BI, excess insurance, workers’ compensation, commercial general liability insurance, and directors’ and officers’ liability insurance, among others. The reintroduced bill requires all insurance carriers to offer pandemic P&C coverage, rather than permitting them to opt into the program. Voluntary participation was a key tenet of PIA’s support last year.
PIA appreciates Rep. Maloney’s efforts to continue the conversation on how best to protect businesses from the potential economic devastation of a future pandemic, but the changes in the 2021 version of PRIA are unworkable. As always, PIA will continue to work with policymakers to find common ground as this dialogue continues.