Industry groups react to passing of the SAFE Act of 2019
The House Committee on Financial Services approved the bill with a vote of 45 to 15.
Democratic control of the U.S. House of Representatives has brought a new wave of support to the cannabis industry. On March 28, 2019, the House Committee on Financial Services voted 45 to 15 to pass H.R. 1595, the Secure and Fair Enforcement Banking (SAFE) Act of 2019, which was drafted “to create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes.”
The bill was authored by U.S. Reps. Ed Perlmutter (D-Colo.) and Denny Heck (D-Wash.) and cosponsored by Reps. Warren Davidson (R-Ohio) and Steve Stivers (R-Ohio).
While more than 30 states and the District of Columbia allow for marijuana in some capacity, it remains illegal under federal law. This has created a sense of uncertainty for insurers looking to offer coverage to cannabis businesses. The risks — like those of any other business — can range from product liability, consumer class action suits, cybersecurity and more.
Related: Insuring cannabis companies remains problematic
Around the industry
A joint statement from the American Land Title Association, American Property Casualty Insurance Association, The Council of Insurance Agents & Brokers, Reinsurance Association of America and the Wholesale & Specialty Insurance Association: “[Congressman Stivers'] amendment will prevent civil liability for agents, brokers, and insurers, their officers, directors or employees for the same. It is an important step toward legal certainty for our industry. Therefore, we also would support final passage of H.R. 1595 with the inclusion of Congressman Stivers’ amendment.”
PIA National: ”As Congress begins to consider legislation on this issue, PIA National is concerned about protecting independent insurance agents from the discrepancies in state and federal law and regulation pertaining to the legitimate businesses arising from the gradual legalization of cannabis and related products at the state level.” says Lauren G. Pachman, counsel and director of regulatory affairs. “We look forward to working with Congress to ensure that independent agents can do business in this rapidly-expanding area without putting themselves or their clients in legal jeopardy.”
The American Property Casualty Insurance Association: “The SAFE Banking Act, HR 1595, with the addition of the Stivers Amendment is a good first step to ensuring the needed clarity for insurers that wish to provide financial services in states that have legalized marijuana,” says Wesley McClelland, vice president of federal government relations. “While the bill does not address all the potential transactions that our industry is compelled by states to provide to individuals and businesses, we hope to continue working with the bill sponsors and supporters to address the larger set of issues that insurers face as more states look to legalize marijuana.”
Related: Doing business with the cannabis industry? Make sure your insurance covers you