P&C insurance issues to consider on Election Day 2020
The decisions voters make this election could impact the P&C business in 2021 and beyond.
The U.S. is just days away from knowing whether a new presidential administration will enter the White House or if the existing administration carries on for another four years.
This year, voters will base their ballot decisions on issues such as health care, immigration, and COVID-19, to name a few. Property & casualty insurance issues are likely not top-of-mind. However, who ends up in the Oval Office and Capitol Hill could impact the P&C business for years to come.
Pandemic business interruption insurance coverage
Many businesses hard-hit by the global pandemic have turned to their insurers to cover COVID-19-related business losses with little or no success. Now, thousands of lawsuits are challenging business insurance policies, arguing that policy language does, in fact, insure virus outbreaks.
Although judges have handed down decisions in some of these cases, it could take years for all the suits to move through the court system.
The other option is for states and federal legislatures to step in and mandate how insurers treat COVID-19 insurance claims.
Several proposals are already being considered by lawmakers, such as the Business Interruption Relief Act, sponsored by Rep. Mike Thompson (D-Calif.), that would create a voluntary program that would reimburse the insurers that voluntarily payout business interruption claims.
Another piece of legislation, the Pandemic Risk Insurance Act of 2020, is modeled after the Terrorism Risk Insurance Act of 2002 and would establish a similar federal backstop for pandemic losses.
“All of these proposals have generally been driven by Democratic House members. Very little has been officially proposed from the Senate side or by House Republicans,” writes Michael Giusti, senior writer at InsuranceQuotes.com, in a recent report. “That is not to say Republicans haven’t weighed in on post-pandemic insurance issues. They have aggressively pushed for businesses to be allowed to reopen, and when they do, to be protected from liability suits.”
According to Giusti, Republicans are pushing for liability protection in anticipation of lawsuits alleging that employees or customers contracted the coronavirus on a business premise. “To prevent this, Republican lawmakers have been insisting that any new stimulus bill include liability protections for businesses that reopen — a provision generally unpopular among Democrats, who argue that exempting businesses from liability would lead to them taking unnecessary risks with the health of their customers or employees,” Giusti adds.
Flood insurance reform
The National Flood Insurance Program (NFIP) avoided a lapse in funding when Congress voted last month to extend the program through Sept. 30, 2021. Long-term reauthorization of the program, however, remains uncertain.
“The thing about flood insurance, though, is it is not a partisan issue so much as a geographic issue. Texas, Louisiana, and Florida make up the majority of policies, so politicians from those states tend to support strong subsidies and low rates,” Giusti said to PropertyCasualty360. “On the other hand, other states that don’t account for quite as many flood claims tend to prefer more market-based pricing. If Congress ends up split again with a Democratic House and a Republican Senate, I don’t see much chance for a long-term reauthorization. That said, it is such a tangled knot, I am not sure how a unified Congress would be able to do much, either.”
Insurance commissioner races
Four states are holding insurance commissioner elections this year.
Delaware’s incumbent commissioner, Trinidad Navarro (D), faces Julia Pillsbury (R). In North Carolina, incumbent Mike Causey (R) is running against Wayne Goodwin (D). Voters in Washington will choose between incumbent Mike Kreidler (D) and Chirayu Avinash Patel (R). Incumbent Jon Godfread (R) in North Dakota is running unopposed on this year’s ballot after candidate Travisia Martin (D) was disqualified from the general election for not meeting the office’s five-year residency requirement.
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